Top Benefits of Supplier CollaborationInsights ● 16 July 2021
Until recently, companies in search for supplies adopted a transactional approach to purchases based only on the economic variable and on cost-cutting, fallacious due to its intrinsic limits and unable to generate real value.
Today, the centrality of the contribution of suppliers leads to overcoming this approach and Buyers manage the relationship with suppliers in a collaborative and increasingly strategic way.
The main elements affecting the centrality of the supplier are:
- The need for flexible and high-quality supplies.
- Product innovation.
- Involvement in the value chain of the producer.
- Involvement in product R&D.
Finally, the need to increase the number of supply sources and find suppliers geographically close to the buyer and able to guarantee immediate delivery becomes increasingly pressing.
Focusing on strategic partnerships is key to increase the value of production and maximize profits: these partnerships can be horizontal, vertical, or mixed, but mainly need to be capable of fully integrating with the processes and business demand.
What makes the difference in building sustainable and valuable partnerships?
To improve the level of service and strengthen procurement processes, a new, more inclusive, and proactive paradigm is needed. This new approach looks beyond purchasing and aims to establish long-term relationships focusing on innovation, complete automation and digitization of processes, and the improvement of the quality of products or services.
Active collaboration with suppliers develops, in an essential way, through its digital efficiency, or, elaborating it, through the use of advanced Procurement software capable of optimizing not only supplies but also the process of selecting suppliers and the communications that accompany all processes, from onboarding to post-purchasing.
The challenge, therefore, becomes to find a complete software, capable of automating processes as much as possible and integrating the management of all suppliers gaining multiple benefits:
- More effective and efficient identification of supplies capable of generating value.
- Long-term collaboration between all players involved in the entire supply chain.
The definition of objectives between strategy and operations
The benefits of collaboration in the supply chain are many, however, before establishing profitable partnerships through an effective Supplier Management software, you need to identify the objectives to pursue. This is key to be able to measure the results obtained through the implementation of the new management tools for corporate governance.
The adoption of new tools is preceded by a profound change in the corporate organizational culture that must be shared by all the players in the system.
The starting point is to adopt appropriate software to automate collaboration and improve the management life cycle both from a strategic and operational point of view.
Innovate the Supplier Collaboration to maximize the value of e-Procurement
A complete application focused on enhancing Supplier Collaboration allows you to radically change the main procurement processes:
- Supplier Onboarding: an efficient procurement software offers, first of all, solid support during the supplier onboarding phase, reducing the initial effort to find quality supplies. At this stage, starting with the segmentation of suppliers is the best option as it will allow faster searches based either on specific attributes of the product or service, or also on customizable supplier tags. Starting from a custom consultation on Category Management, the platform is configured to offer a supplier registration portal built around the needs of the Buyer, with significant time savings for both the supplier and the buyer.
- Supplier and Contract Management: thanks to the integration of different software modules you can offer incentives to Supplier Collaboration. How? Simplifying requests for quotation, as well as negotiation and ordering processes, which can be managed with the e-Sourcing functionalities or with electronic catalogs. The results: faster processes managed through easy-to-use software, which automatically leads from the Sourcing event to Contract Management, with significant benefits in terms of compliance and standardization of procedures.
- Information flows and feedback system: once the suppliers have been included in the company pool, the actual communication takes place in a separate and reserved online workspace that allows you to simplify and standardize information flows with suppliers. Effective communication encouraged and automated by the software, is capable of conveying not only information and transparency but also expectations and two-way feedback to increasingly create a feeling of mutual trust and responsibility. Offering formal feedback incentives is much more productive than relying on informal mechanisms, and leads to a more active and engaged relationship with suppliers over the long term.
- Vendor Rating and Monitoring: specific software modules allow you to implement a governance model focused on the performance and monitoring of all phases of the procurement processes. The starting point of an effective analysis is the definition of criteria and KPIs. Afterward, you can rely on their automated execution during the evaluation and Vendor Rating phase, functional to simple and immediate identification of supplier strengths and weaknesses. In addition, the software promotes knowledge sharing and, thanks to structured and customizable dashboards and real-time data analysis, excellent results are achieved in terms of collaboration, greater control, and greater responsiveness. The advantages become exponential when the procurement suite communicates with other systems used in the company, for example with ERP systems, which, once connected with the e-procurement software, allows automatic updates and guarantees complete control of the entire workflow.
Having digital access to a large pool of pre-qualified suppliers and, at the same time, nurturing stable relationships with key suppliers by making them real partners is key to build a solid network that guarantees flexibility and greater operational efficiency. Companies must be ready to innovate quickly and switch suppliers in the event of unexpected market shocks.
Furthermore, taking care of these relationships, not just those with customers, brings benefits in terms of profits and reputation to all the players in the system.
Software such as Online Procurement equipped with the useful functionalities described allows you to promote a culture based on proactive communication, transparency, consistency, and knowledge sharing. A proven path to truly retain partners in the long term by creating a Supplier Collaboration that generates real value.
Maena MurgiaSales Manager - DigitalPA
The Author
Specialized in Procurement and Spend Management, she guides customers in the implementation of innovative solutions able to get quantifiable results in the purchasing process.
Graduated in Public Relations, she has over 10 years of experience in the role of Head of External Relations and New Business Development, she has held positions as a Lecturer in Corporate Communication up to the position of Head of CRM, Customer Satisfaction and Marketing Communication Management.
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