How Does Supplier Benchmarking Help Telecom Industry Players?
The advent of 5G, increasing prevalence of remote work, and rapid urbanization have led to a massive surge in demand, innovation, and growth for the IT and telecom industry. As competition rises, companies attempt to improve efficiency, differentiate their offerings, and deliver high-quality products and services to their consumers. Supplier benchmarking helps companies utilize data, analytics, and benchmarks to identify the ideal partnerships and best fit suppliers that can help them achieve these targets efficiently. The IT and telecom industry has witnessed significant change over the last two decades, and with personal smartphones, laptops, and computers becoming more prevalent, all network and telecommunications services have become a necessity worldwide. Maintaining a robust and streamlined supply chain, meeting consumer expectations, and achieving a strategic lead in a competitive and constantly evolving market requires data-driven decision-making, collaborative and sustainable partnerships, and long-term strategies that support growth. Expanding the portfolio of services and products offered, improving upon current offerings, and meeting the industry standard is also necessary to succeed in this market. Therefore, CPOs and supply chain managers must understand the steps for conducting and utilizing supplier benchmarking effectively and developing partnerships that can support sustainable growth for their business.
What is the Ideal Approach and Process for Supplier Benchmarking?
Establish Clear Metrics: Identifying, negotiating, and entering into contracts with suppliers is a time-consuming process that requires substantial investment of time, labor, and analytics. To efficiently identify the right suppliers, it is crucial to establish a clear standard, by assessing past and current partnerships, as well as reviewing suppliers’ offerings and quality of service within the market. Successfully choosing and benchmarking suppliers requires establishing a clear set of key performance indicators or metrics that help develop an objective and data-driven comparisons between existent and potential partners. Well-established metrics also helps companies ensure that the benchmarking process is standardized and all suppliers are held to the same expectations.
Develop Templates: When conducting benchmarking of various types, establishing a template to rely on for evaluation, determination, and later comparison is necessary. For supplier benchmarking, this template includes an established score card that helps companies identify the data required for a concise and accurate decision. This step helps companies identify the data that needs to be collected, the terms to be assessed, and the approach to scoring and qualifying various suppliers or vendors for benchmarking. These templates must also include the objective of the process, the companies’ strategic goals, and the drivers for the key project benefits. With this information, companies can enter the next stage of data collection with an efficient and gain valuable insights.
Collect and Compile Data: Utilizing the key metrics and templates developed in the previous steps, companies can collect the necessary data required to establish a clear benchmark. Supplier benchmarking is a complex process and requires a substantial amount of data from various potential partners, suppliers, and vendors within the market. It also includes assessing the quality of services or products, prices offered, ethics, strategic objectives, and business goals of all candidates in the process. After collection of data, companies must compile them, as per the templates drafted, review and discard of unnecessary or inaccurate data. During this stage, assessors can also identify any lack of data and conduct the necessary research to fill the gap.
Compare Metrics: Once the data has been collected, compiled, and organized, companies can discuss and scrutinize suppliers’ performance as per the determined metrics to enable an objective, accurate, and data-driven decision. During this step, suppliers and vendors can be removed or prioritized as per their performance, and a list of finalizers can be created to help the decision-making process. Establishing a benchmark, and efficiently utilizing supplier benchmarking to choose the right partners in the future requires precision and accuracy, and at this point of the process, companies can utilize data to achieve the same. Comparing various suppliers as per the predetermined metrics can help the companies establish and rely on this benchmarking process during current and future supplier identification processes.
Determine Benchmark: Choosing the ideal suppliers or determining an ideal benchmark can be challenging, and while the use of data significantly simplifies the process, the final step requires a comprehensive understanding of the market, the companies’ needs, and an ability to deliver beyond data. For instance, during the benchmarking process, a supplier may be identified as offering the ideal prices for products and services of high quality, however, another potential partner may provide high quality offerings, good customer service, and similar strategic goals at a higher price. Determining a benchmark requires understanding the needs and priorities of the business, and focusing on a partner that can successfully meet all expectations.
The rising demand for 5G and strong networks has led to a plethora of challenges for IT and telecom industry players, and companies are struggling to maintain an efficient supply chain while meeting consumer demand, producing high quality products, and reducing costs. A renowned IT and telecom services provider was struggling to identify the ideal suppliers to improve their supply chain efficiency, overcome the challenges of a rapidly developing market, and gain market share. To tackle these obstacles, the company chose to partner with SpendEdge, and leverage our expertise in supplier benchmarking and identification. Our experts helped the company determine their needs, expectations, and key performance indicators for suppliers, develop a score card, gather data on potential partners and suppliers in the market, study industry benchmarks, and gain further clarity into the supplier identification process. Additionally, the SpendEdge experts helped the company utilize data and establish a clear benchmarking and supplier benchmarking process to be leveraged for future supplier selection processes, subsequently helping the company overcome major shortcomings within their procurement processes and strategies. The service provider successfully established a benchmark, and utilized the same to identify their best fit suppliers, overcoming industry challenges and establishing themselves as industry leaders.