Maximizing Supplier Performance Through Source-To-Pay Solutions
Managing Supplier Performance
Supplier performance is crucial issue facing modern business leaders. According to survey conducted by the American Purchasing Society, over 70% of executives found managing supplier relationships to be their most formidable and strategic challenge in the coming year. With such sizable investment of resources at stake and high potential for risk, it is incumbent upon executive decision makers to ensure that their supplier networks are well managed and producing valuable results.
One cost-effective and efficient way to ensure prudent supplier management is to incorporate Source-to-Pay solution into the enterprise architecture. Source-to-Pay solution is software platform that features suite of integrated, end-to-end tools that enable the procurement process from the foundation to the completion of payment to the supplier. Such platform automates the official processes that occur between buyers and vendors with focus on optimizing the time and dollar investments made towards supplier relationships.
To take full advantage of the benefits that Source-to-Pay solution can bring to an enterprise environment, it is essential to understand the stages of the procurement process that the platform can support. This guide explores each step in detail and shows how executives can utilize the Source-to-Pay system to maximize the performance of their supplier networks.
Step 1: Mapping the Supply Chain
Before the procurement process begins, executives must first map their supply chain using Source-to-Pay solution. This involves taking an inventory of the product and services that their business relies upon, noting the suppliers that provide them, and assigning performance roles and responsibilities. In addition, users are incentivized to take into consideration regional market forces and environmental influences that might also impact supplier performance.
Step 2: Selecting the Suppliers
Once the supply chain is mapped, the second step requires executives to select their suppliers. Leveraging Source-to-Pay platform expedit is this process by filtering suppliers based on the criteria that executives want to prioritize. For instance, those seeking to simplify vendor management might want to hone in on suppliers that offer consolidated invoices and flexibility in payment schedule. On the other hand, those wishing to reduce costs may focus on suppliers that offer fixed or negotiated pricing.
Step 3: Monitoring Supplier Performance
The third step focuses on monitoring the real-time performance of suppliers. Source-to-Pay platforms provide executives with suite of metrics that can measure the performance of their suppliers both individually and relative to their competitors. This includes statistics tracking cost and labor efficiency, response times for communications, on-time shipment rates and quantity of products received. Such data allows executives to gauge performance gaps and gaps as well as identify which suppliers are leading the pack in delivering value.
Step 4: Mitigating Risk
One of the key benefits of using Source-to-Pay solution is that it provides users the tools to mitigate risk. Executives can digitally protect the security of their supply chain through fraud prevention and payments that are secure and encrypted. Risk mitigation is essential in modern business environments, and the Source-to-Pay platform enables executives to take control of the risks associated with supplier networks.
Step 5: Setting up Contract Management
The fifth step involves setting up contract management that adheres to the rules and regulations for both the buyers and vendors across their respective countries. Source-to-Pay solutions include legal language that can easily be formatted and customized to create contracts tailored to firm’s specific needs. Additionally, executives can track contract renewals and efficiently manage the expiration and renewal of their contracts.
Step 6: Establishing Governance and Compliance
The last step in utilizing Source-to-Pay solution relates to establishing effective governance and compliance measures. Source-to-Pay aids executives in doing so by optimizing visibility and access from the companies data repository. This, in turn, allows executives to monitor supplier performance in relation to the specific legal requirements of the industry and ensures that appropriate actions are taken when issues arise.
Conclusion
Utilizing Source-to-Pay solution helps executives to best manage their supplier networks and maximize the performance of their suppliers. From mapping and selecting suppliers, to monitoring performance and mitigating risk, using Source-to-Pay empowers executives to keep track of every stage of their procurement process and optimize their investments effectively. By leveraging the suite of tools provided by the platform, executives can ensure that their business is equipped with the most up-to-date and cost-effective solution available.
