Getting more from your suppliers starts with you

How supplier management is impacting organizations more than ever.

Organizations are starting to adopt a new attitude when it comes to their suppliers – treat them like customers. This seems basic, but the truth is, supplier management is evolving fast; it is critical not only to catch up but to get ahead of the curve.

Supplier management’s significance has grown in scope and has its own defined lifecycles, like supplier onboarding overlapping source-to-contract and procure to pay processes. Why? Most organizations now spend between 30% and 70% of revenues procuring third-party goods and services — expenditure levels that present considerable opportunity and risk. A compelling event like a supplier failure, geopolitical affair or natural disaster can have an enormous impact on your bottom-line. That demands a highly formalized and effective approach to identifying and managing the right suppliers.

There is quite a bit you need to know about Supplier Lifecycle Management (SLM) to maximize its growing potential. Here is just enough to get you going with the right approach.

Supplier Management 101 (Part 1): Introduction

Michael Lamoureux and Pierre Mitchell start this series with a look at how the lines of supplier management blur and bleed across disciplines and departments. If you think about supplier onboarding and validation, it’s as much a part of sourcing as it is legal, risk and compliance – extending even into corporate social responsibility. Supplier lifecycle management touches on strategy and planning up front and closes the feedback loop through strategic sourcing; affecting collaboration and development throughout the organization. And there’s also contract performance, revalidation and category management.

Obviously, technology is how this is all possible. Suppliers are integral to your success, so ensuring they generate competitive advantage, not risk, requires visibility and control through accelerated digitization and a more holistic process.

Supplier Management 101 (Part 2): Requirements Framework

If technology is what’s going to help you tame the supplier management beast, you need to develop a requirements framework that takes you from supplier onboarding to continued success. Supplier management isn’t a straight line, but a circle with a changing landscape. As such, the required technology architecture to make it work should start by spanning the four main processes of the supplier management lifecycle: Engagement, Relationship, Performance, and Risk & Compliance.

Of course, each of those comes with its own critical subsets of procedures. As an entire lifecycle of engagement and re-engagement – a continuous process that requires review, analysis and adjustment — successful supplier management depends upon the holistic framework mentioned earlier. Part 2 provides the business context and data alignment required to understand which technology solutions will lead to seamless success.

Supplier Management 101 (Part 3): Defining Your Solution Approach

With a suitable background and a requirements framework in place, you can start mapping your supplier management needs to available solutions. Part 3 breaks down the technology elements and deep capabilities this multi-layered, multi-part process loop demands at each stage. By detailing the components of SLM, it’s much easier to see which solutions can do the job and where potential gaps may occur. In other words, your supplier management needs – and desired outcomes – will dictate which technology has the best chance of delivering the results you are after. There are many options out there promising all kinds of benefits. Solution suites, point solutions and platforms all have their pros and cons — some more than others.

Suppliers are as much a part of your organization as the people who work there. They require just as much management, nurturing and relationship building to achieve continuous, quality performance. At Determine, a Corcentric company, our Cloud Platform-based Supplier Management solution empowers you to manage suppliers throughout the lifecycle, supporting your needs from onboarding and validation to performance KPIs and beyond.

Looking for more? Check out all our other resources and blogs, or contact us to learn more or schedule a demonstration.