Supply chain professionals are tasked with jobs that can be overwhelming. They need a strong, smart team who understand strategic goals and how to achieve them. Supplier relationships grow out of the work these teams do, and those relationships have immense value to the supply chain.
Traditionally, supplier relationships have been transactional, focusing only on price or volume, with little regard to the ways suppliers can support the business. Suppliers are merely expected to go through the motions of taking and delivering orders on time.
But suppliers are smart, savvy companies themselves. They can potentially add immense value to the supply chain if they’re invited into the conversation and given the tools they need to succeed.
If you’re a supply chain leader or team member, it’s time to start thinking differently about your suppliers. Into the new future, they will be critical to your success.
This article will explore supplier relationship management software (SRM), its features, benefits, and how both sides can use it to hit strategic goals, improve overall performance, and eliminate supplier risks.
Out With the Old
The transactional model of supplier management focused mainly on processing purchase orders (POs) and delivering the lowest price possible for parts and materials. One of the primary challenges is that the processing step is almost always done manually.
The buyer cuts a PO, gets it approved internally, then sends it to the supplier via email. The supplier then (hopefully) sees it and replies with an email acknowledgment. Then the chase begins.
Did the buyer add the acknowledgement in your enterprise resource planning (ERP) system? If not, the data is immediately inaccurate.
Our research shows that over half of all POs will change at some point in their lifetime, and in order to push their teams to success, supply chain leaders must know the real-time status of every order line from the time it is cut until the order is received on the loading dock.
Most direct materials procurement teams struggle with these processes. Buyers are overworked, often spending evenings and weekends wading through spreadsheets and emails. And data is often batched once per week or sometimes even once every two weeks.
That means forecasting, demand planning, and other strategic initiatives are made using bad data. Or worse, the decision is delayed until it’s too late and costly penalties are incurred.
Supplier risks can impact the organization. Historically, buyers have focused on the lowest of three price bids on the part or material needed, then used volume as the primary driver of the decision. But, this narrow approach does not take into account many other variables and strategies that could benefit the business if taken into account in a larger supplier management strategy.
Small and mid sized manufacturers should be focused on scaling the business, but hundreds of hours of clerical work and erroneous information are huge hindrances to that growth.
It’s time to focus on supplier performance, risk management by bringing buyers and suppliers together in a supplier relationship management software.
In With the New
Manual clerical work is no longer enough to stay ahead of the competition and hit your customer delivery goals. But, what’s next? Supplier relationship management software like SourceDay has what you need for all of this and more. Here are some of the ways SourceDay’s SRM software delivers.
As mentioned above, buyers are buried in tactical work. Their workflows are terribly inefficient, requiring dozens of extra hours that could be spent on more strategic tasks. Supplier relationship management software eliminates a significant portion of those hours.
For example, many companies who adopt SourceDay for supplier management see a decrease of 25 or even 30 percent of their buyers’ daily PO workload. It’s tough to overstate the savings your business will see by implementing a powerful SRM software.
With that much time freed up, buyers and suppliers become strategic partners in the business. They can both now spend their time on value-add tasks like improving supplier relationships and performance, identifying cost savings, and sourcing new materials.
SourceDay’s supplier relationship management software exchanges administrative work for work that drives improvements and can scale easily.
The back-and-forth communication alone delivers significant time savings. In the past, emails went back and forth containing spreadsheets, acknowledgments, and notes about changes. Cluttered inboxes are no place for critical, urgent information.
SourceDay improves the quality of this communication via line-level details of every single PO change. Every message exists within the context of specific POs, and every user involved receives notifications every time something changes.
Improving overall supply chain management requires eliminating as many manual touch points as possible and consolidating all of that into a single SRM software that requires 20 minutes instead of multiple hours every day.
Earlier we discussed a common old strategy for pricing parts and materials. Many buyers will request pricing from three vendors, then choose one based on volume and lowest price of the part itself.
It’s also common for buyers to focus significantly on primary suppliers who provide a high percentage of a certain part. With all the manual work that goes into onboarding a new supplier and managing that relationship, diversifying into new supplier relationships can seem daunting.
Not to mention that without a supplier relationship management software, supply chains carry significant supplier risks—risks of delays, penalties, and ultimately, poor customer delivery. These risks are very real, and their consequences can be devastating.
Maybe the primary supplier offered the lowest price of the part, but if getting the order to your loading dock requires expedite fees, dozens of extra hours of clerical work, and poor customer satisfaction, it’s time to think about diversifying your supplier base.
SourceDay’s supplier relationship management software makes it possible to understand the total cost of the materials (not just the sale price), and work to lower those costs through greater efficiency and visibility.
Speaking of visibility, SourceDay’s supplier relationship management software provides what old, outdated systems cannot: real-time information about everything going on in your supply chain at all times.
Data visibility is one of the major keys to supply chain success. Manually entering data into the ERP is a recipe for disaster. Data entry errors are common, as are delays in getting the information you need. You need data that is recent and relevant.
SRM software like SourceDay provides line-level data on every PO, including acknowledgments, status, expected delivery date, and more. And anytime something changes, everyone knows immediately.
Supply chain visibility is critical to your success, and supplier relationship management software delivers.
Suppliers are no longer just transactional partners. If you want to get ahead of the competition and deliver to your customers, it’s time to adopt a supplier relationship management software solution like SourceDay and use it to treat your suppliers as the valuable partners they really are.
It’s pretty simple: a supplier’s success is your success. SourceDay provides real-time supplier scorecards which allow buyers and supply chain management pros to see trends such as late deliveries or acknowledgments. If one can’t consistently deliver on-time and in-full, you’ll know and you can take appropriate action.
But what action is that? For starters, diversification is critical to mitigating supplier risks, and supplier relationship management software makes it simple. If the last three years have taught us anything, it’s that disruptions are more common than ever.
But, you still need your parts. To stay ahead of the risk, look to new vendors to provide a chunk of your materials in case one experiences a delay.
Supplier scorecards also let you see spend managed, average minutes per day on SourceDay, how SourceDay is being used by suppliers, how long suppliers take to reply, and what percentage of PO lines are being acknowledged.
For procurement teams without a supplier relationship management software, onboarding new suppliers is often a nightmare. Lots more clerical work, different methods of communication, and uncertainty about performance.
SRM software like SourceDay makes all that a breeze with full onboarding, training, and support. In fact, SourceDay guarantees a 70 percent supplier adoption rate within the first year.
This information should put a lot of minds at ease. By consolidating the PO process into one supplier relationship management software, communication and data are standardized and located in one place. And with onboarding and training support, buyers and suppliers can hit the ground running without all the hiccups and delays that can occur by adding a supplier manually.
Supply Chain Management at the Speed of Light
SourceDay is a supplier relationship management software that works directly with your ERP to keep data clean, eliminates hundreds of hours of clerical work, and boosts supplier performance like you won’t believe.
You need better visibility, better communication, and strong collaboration. You need SourceDay.
SourceDay stops supplier misses. Full stop.
If this sounds too good to be true, then we should talk. The SourceDay Squad will walk you through it. Let’s get to work.