Tag: Supplier Relationship Management

supplier relationship management

Unraveling Supplier Relationship Management Benefits in the Supply Chain

With the increasing preference for outsourcing non-core competencies, organizations have started to realize that they are becoming increasingly reliant on suppliers. They rely on suppliers in terms of innovative power, security of supply, corporate social responsibility, and on-going cost savings. However, many organizations still fail to realize the true importance of supplier relationship management (SRM), leading to functional incompetencies. Through this blog, we have covered the key supplier relationship management benefits that companies could reap by understanding the real importance of supplier relationship management.

Developing strategic partnerships with suppliers requires a critical analysis of various factors. Request a free demo to know how our experts can provide real-time insights to analyze all such factors.

Importance of Supplier Relationship Management

Supplier relationship management helps align businesses appropriately with suppliers. It focuses on what is critically important for businesses and helps them develop a supplier relationship management framework to collaborate with suppliers.  Supplier relationship management is a systematic approach for developing and managing partnerships that are focused on joint growth and value creation. Additionally, it helps companies to better associate with the limited number of key suppliers based on trust, open communication, and empathy to achieve supplier relationship management benefits.

Supplier Relationship Management Benefits

Improves efficiency

This one of the major supplier relationship management benefits that companies aim to achieve. Improving relationships with suppliers helps companies to address delays in the supply chain process. Suppliers also gain a better understanding of the business they are collaborating with; thus, boosting efficiency.

Minimizes cost

Engaging with new suppliers involves significant costs. By better understanding supplier relationship management benefits, companies can easily eliminate many of these costs. Building mutually beneficial relationship with key suppliers helps companies to minimize costs, reduce delays, and quality issues. Furthermore, it helps identify cost savings opportunities in the supply chain and the quality of supplier output; thus, improving the consumer services they offer.

Want to know how improving relationship with suppliers can help companies to reduce excess costs?

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Drives greater value

One of the key supplier relationship management benefits is its ability to help companies gain detailed insights into the lifecycle of suppliers and analyze their performance. This helps them identify key areas of improvement and devise strategies to drive greater value from their existing suppliers. Continuous process improvements through long-term relationships with suppliers helps in the creation of a more effective and efficient supply chain.

Mitigates supplier risks

Mitigating supplier risks is one of the unequivocally critical supplier relationship management benefits that businesses need to achieve to sustain themselves in the long term. With the growth of organizations, supply chains and the resultant supplier relations becomes complex; thus, increasing the likelihood of detrimental supplier risks. In such a scenario, understanding the importance of supplier management enables companies to identify and assess the impact of supplier risks and proactively devise risk mitigation strategies. To gain detailed insights, request more information here!

Supplier Relationship Management Benefits: Steps to Achieve True Efficiency

There is a growing realization among companies that they have not been able to fully understand the importance of supplier relationship management. As a result, they miss out on opportunities to improve their offerings. Also, to help companies move from realization to action, we suggest that they take a transformational approach, which considers the value potential, complexity, number of stakeholders, and organizational impact. Although, establishing an effective supplier relationship management process is difficult, businesses can start by building a supplier management framework. Typical activities that will help companies to reap supplier relationship management benefits include:

  • Analyze current supplier management programs, including strengths and improvement opportunities.
  • Formulate strategies to streamline SRM initiatives with business objectives.
  • Creating business cases to calculate/estimate the ROI.
  • Selecting a pilot project with key suppliers of the company.

Improving relationships with suppliers requires companies to analyze suppliers and imitate various strategies. Get in touch with our experts to know how our experts can help you gain a better understanding of your suppliers.

Supplier management solutions

Why Investing in Supplier Relationship Management is a Bankable Idea?

Businesses often tend to ignore one thing: supplier relationship management. They focus on fostering customer loyalty and ignore the fact that establishing relationships with suppliers and managing them is equally important. In fact, the rise in the number of suppliers and increasing complexity of supply chains is making supplier relationship management even more crucial.

However, companies have now realized that the supplier relationship management is imperative to develop bilateral, trust-based relationships with key strategic suppliers to reduce supply risk, decrease long-term costs, and develop more efficient procure-to-pay and supply management processes. This is compelling companies to leverage the benefits of the supplier management program and systematically manage interactions with key strategic suppliers while maximizing the value of those interactions for their procurement organizations. In this blog, we have compiled a list of benefits that companies should look to achieve through supplier relationship management.

Effective supplier relationship management increases profitability and drives efficiencies for businesses. Want to know how? Request a free demo to improve your supplier relationship management now!

Supplier relationship management benefits

Optimizes procurement process

Many times, the turnaround time between registration of requirement and the delivery of the goods and services is invariably long. The major reason behind this delay is the time spent by the procurement department in handling the request for quotation (RFQ) processing. The preparation and issue of RFQ’s followed by quotation processing, shortlisting and negotiations can be a sluggish and drawn-out process. Continual ‘one off’ RFQ processing represents ‘death by a thousand cuts’ for the procurement department leads to significant delays in delivering the requirements of businesses. Time spent in supplier relationship management is represented in the company’s e-catalogs that reduces the number of RFQ situations and speeds delivery schedules dramatically.

Another issue pertaining to the procurement cycle is the time taken for requisition approval. Managers involved in the requisition release hardly have any time to look into the operational IT systems. Requisitions wait unnecessarily in e-commerce/ ERP systems for the budget holder to sign-on and release them. In such cases, the visibility of the full supply chain becomes a critical piece of equipment. Implementing supplier relationship management strategies addresses the  ‘visibility’ issues efficiently in such situations.

Reduces the number of strategic suppliers

Establishing effective governance is vital to unlocking supplier relationship management value.  It requires alignment within the organization and setting up of internal governance processes with ownership of supplier relationships. Since the ownership of the relationship can lie outside the procurement organization, it is essential to involve the right suppliers from the business in the process. Companies can track operational measures mutually agreed with tier 1 suppliers through supplier relationship management governance and can concentrate on a limited number of strategic suppliers.

Want to know how reducing the number of suppliers can lead to strategic sourcing?

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Improves supplier performance

Although establishing strong contract relationships and ensuring buyer and supplier compliance to those agreements is one part of delivering value, yet it can distract businesses from the ultimate value created from a supplier relationship management.  Value from a supplier relationship comes through innovative and collaborative activities that focus on solving customer problems. This primarily involves sharing of plans between the two entities and jointly defining initiatives that can create long-term value for both organizations through supplier relationship management, such as:

  • Innovative business plans, aligning supplier’s creative efforts to business needs.
  • New market penetration, leveraging strengths and knowledge of both organizations.

Consolidates the supply chain

As supplier’s and buyer’s business work in collaboration,  understanding the inner workings of each other becomes easy through a supplier relationship management process. It helps both parties to adapt their own working practices and operations to better accommodate the other and improve their operational efficiency. The consolidated supply chain further allows the buyers to reduce the number of suppliers they purchase from and streamlines the purchasing process thus making the scope for financial improvements.

Maximizes the usage of inventory

As a result of recent upstream sector trends,  inventory management has started facing several challenges. The transfer of stocks between companies due to mergers and acquisitions is leading to poor visibility and compelling companies to externally procure materials when stocks of material are actually available. Supplier relationship management addresses these issues by automatically determining appropriate sourcing strategies using catalogs and integrating them with a back-end system that is capable of handling the separation of stocks.

SpendEdge’s advantage

SpendEdge’s strategies enable businesses to consolidate suppliers within specific supply markets and reduce purchasing and supplier management costs while increasing the efficiency of their procurement process. It analyzes various parameters including equity interests, sales volumes, technology base, manufacturing, and distribution capabilities, and helps companies make better purchasing decisions by improving the supplier relationship management.

Wondering how we can help your organization? Get in touch with our experts to improve your supplier relationship management.

IR33

Six Effective Ways to Build Better Supplier Relationship Management

What is supplier management process? 

Most organization rely on third-party vendors or suppliers for the purchase of goods and services. Therefore, how an organization engages, manages, and communicates with their suppliers and builds supplier relationships is critical to their overall success. Supplier relationship management refers to the process systematic assessment of the suppliers’ assets and capabilities in view of the organizations overall business strategy. This determines activities to engage in with different suppliers, and planning and executing of all interactions with suppliers to maximize the value realized through those interactions. Supplier relationship management seeks to develop a two-way, mutually beneficial relationships with the strategic supply partners of a company. Supplier relationship management helps build better supplier relationships and thereby achieve greater levels of innovation and competitive advantage than could be achieved by operating independently or through a traditional, transactional purchasing arrangement.

Supplier management strategy and solutions for business

The strategic approach to supplier relationship management has always been critical for businesses that rely on third-party suppliers. For businesses that strive to succeed in the market, having trusted relationships with dedicated suppliers should be one of the primary goals. In this blog post, we are going to take a closer look at some of the key supplier relationship management strategy that will help you improve relationships with suppliers and streamline your supplier relationship management framework:

Suppliers are not just vendors

For a smooth supplier relationship management, businesses must consider their suppliers as their partners. This partnership should be based not only on financial transactions but also on mutual trust and loyalty between both parties. Suppliers should be made to feel like they are a part of the business. They must be informed about your processes, such as product launch and promotions. It is also essential to listen to their concerns or grievances. 

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IR39

4 Effective Strategies to Make Strides in Supplier Relationship Management

Supplier relationship management (SRM) is an integrated approach that addresses and provides benefits for both the buyer and seller sides. It should be noted that not all suppliers are the same, so not all customer-supplier relationships should be dealt with through a single strategy. The typical goal of supplier relationship management is to streamline and improve processes between a buyer and its suppliers. It is all about developing a mutually beneficially relationship with suppliers, especially those deemed as most strategic to the brand, to promote quality, efficiency, and innovation among several other benefits. As with many procurement activities, at the most basic level, supplier relationship management can be used to reduce both prices paid and costs to the organization. Developing appropriate styles of interaction can also make it is possible to save money. The key to developing an effective supplier relationship management approach is a well-understood supply base.

Strategies for better supplier relationship management

Leverage technology

Investing in a good supplier management software helps companies keep track of information about their suppliers in one place. Companies can also take one step further and install an advanced purchase order management software which is useful in creating, processing, and tracking purchase orders with the suppliers.

Ensure timely payments

Fulfillment of payments on time is a vital element of an effective supplier relationship management. This is also a critical step in ensuring that the company’s valuable suppliers are not lost. Timely payments also facilitate companies to establish their credibility and reliability as a customer to their suppliers. Just like companies like to receive prompt delivery of goods and services from the suppliers, the suppliers expect prompt payments. In case companies are unable to make payment on the date agreed, then they must inform the supplier as soon as possible with the date on which they can expect the payment.

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IR31

Top Players Dominating the Enterprise Content Management Market

Documents and records are of vital importance in any business enterprise. Business success and operations hinge on the availability of the correct document and records. Enterprise content management ensures that businesses get such digital content when required. Enterprise content management is a set of defined processes, tools, and strategies which allows businesses to efficiently obtain, store, organize, and deliver critical information to its employees, customers, and business stakeholders. It helps companies to streamline the lifecycle of information including image files, documents, CADs, emails, and more. ECM helps organizations build a centralized repository of structured, unstructured, and semi-structured information, which can be accessed later by authorized users. It helps simplify storage, improve security, and provide better control over different versions of documents. The recent surge in the volume of unstructured data has driven the demand in the enterprise content management market. The recent procurement market intelligence report from SpendEdge anticipates the market to grow at of 23%. So which are the top companies that are competing in this growing market?

Request Free SampleTop enterprise content management vendors

IBM

IBM is a multinational technology company having operations in over 175 countries. The company invests 6%-7% of its annual revenue each year for R&D that focuses on high-growth and high-value opportunities. IBM’s Enterprise Content Management (ECM) software suite can capture, analyze protect, activate, and engage with content, both structured and unstructured. Their ECM service includes content management, document capture and imaging, and workflow and case management. The company also offers content management systems (CMS), which is cloud-based. In January 2018, IBM and Salesforce announced the expansion of their strategic partnership to bring together IBM Cloud and Watson services and Salesforce Quip and Salesforce Service Cloud Einstein.

OpenText

OpenText operates in the Enterprise Information Management market and develops enterprise software for digital transformation. The company offers software that assists organizations in finding, utilizing, and sharing business information from any device. The company also helps companies ensure information security. The company offers a host of content management products including applications, solution extensions, product extensions, and industry extensions. In early 2017, OpenText acquired Dell EMC’s content management division making it one of the largest player in this market.

Hyland

Hyland is a software company that develops ECM and process management software suite known as OnBase. This suite finds application in industries such as insurance, public sector, financial institutions, higher education, and healthcare. The company enables organizations to navigate from digital information to digital transformation. Their cloud-based ECM solutions offer multiple deployments, test and sandbox options.

Oracle

Oracle provides products and services that address all aspects of corporate information technology environments, including applications, platform, and infrastructure. The company has over 400,000 customers worldwide, in industries including engineering and construction, healthcare, financial services, banking, public sector, logistics, communication, and life sciences. Oracle offers cost-effective enterprise content management systems encompassing end-to-end content lifecycle management. Their ECM system provides data management, imaging, content publishing, records management, and digital asset management features.

To get a full list on the top vendors in the enterprise content management systems market along with supply market insights, procurement challenges, pricing models, and supplier selection criteria in SpendEdge’s upcoming report on the global enterprise content management market.

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IR4

Supplier Relationship Management Helps a Global Construction Industry Client Build a Superior Competitive Advantage

Category Overview

Lately, the construction industry has witnessed a steady growth, primarily due to the major works occurring in high-profile projects including the electricity, water and sewerage, and rail sub-sectors. However, according to the supplier relationship management experts, firms operating under razor-thin profit margins are expected to struggle with rising material and labor costs. As a result of these challenges, players operating in the construction industry space have started opting for supplier relationship studies to build better relationships with the suppliers. Moreover, these studies offered by SpendEdge, help firms in this industry space to gain a superior competitive advantage over their peers.

The Procurement Pain Point and Insights Offered

A global construction industry client wanted to devise a superior relationship strategy with suppliers in the market space and create a win-win situation and increase the profitability of both parties. The client also wanted to design a robust value creation framework for a better customer and supplier relationship. Furthermore, the client wanted to gain a comprehensive understanding of the latest developments and trends in the market and identify the potential supplier risks across the supply chain.request free proposal

To cater to the specific category requirements of the client, the supplier relationship management experts carried out an in-depth two-step research methodology, which included qualitative and quantitative assessments. During the course of this supplier relationship engagement, the construction industry client gained insights on the control points in the value chain that was currently being captured. Additionally, the client was provided with an explicit representation of the merits and prioritization of the opportunities with the help of a robust portfolio analysis.

Fundamental questions answered in this supplier relationship management study include

Construction IndustryBusiness Outcome

This supplier relationship management engagement helped the construction industry client build a superior competitive advantage in the market space. Additionally, the client was offered suggestions on superior supplier relationship strategies to seize opportunities.

To know more our supplier relationship management solutions for construction industry

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IR13

Driving Procurement Process Benefits in 4 Different Ways

Establishing a procurement process is essential for every organization irrespective of the size and nature of the business. Every activity in the procurement process is connected and inter-linked with several other core organizational funSE_Demo2ctions and operations. Being a part of the organization’s corporate strategy, the procurement process is the most vital element that helps in achieving the business objectives and ensuring an effective supply chain management. In order procure correctly and achieve their goals, the business needs specialized professionals who can help them to achieve their revenue targets, minimize costs, and drive profitability.

What is Procurement Process?

Any organization spends more than half of its capital on sourcing and purchasing goods and services; thereby making an effective procurement management habit evitable. The chief procurement officers (CPOs) are well aware of the fact that a slight change in the purchasing costs can have a direct impact on the bottom-line and everything depends on one single decision. Companies must put in place a standard procurement process to eliminate wastage, minimize costs; thereby, ensuring an effective supply chain management. A procurement management process will help organizations to complete purchase orders, facilitates supplier relationship management, approve vendor payments, review supplier performance,

Achieving Procurement Process Benefits in 4 Ways

A procurement process coupled with supply market intelligence can be extremely beneficial for the organization and helps in streamlining its purchase activities. Let’s see how a procurement and sourcing process can drive benefits for the organization.

  1. Conduct a spend analysis every quarter and assess it by developing an in-depth map of your organizations overall spend
  2. Minimizes costs by eliminating wastage in every function across the organization which results in substantial cost-savings. The procurement process helps the business create, drive, and optimize spend activities
  3. Educate and inform every function in the organization on how to drive cost savings and maximizing returns by critically assessing its purchase and spend activities
  4. Leverage supplier relationship management and contract management programs to evaluate suppliers, conduct a supplier risk assessment, and ensure friendly procurement terms that streamlines the procurement management process

 

To know more about the benefits of procurement process

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Supplier Relationship Management Helps an Automotive Industry Client Build Competitive Strategy

Category Overview

In the increasingly competitive market space, suppliers have become the prime target for the manufacturers to effectively track and monitor their production line. With the relentless growth of technology, manufacturers are going under tremendous pressure to increase their visibility through robust product offerings. In the automotive industry, leading business providers are effectively working toward improving their supplier relationship and building their trust with suppliers to enhance their profits and ROIs. Furthermore, businesses are resorting to robust supply chain management to establish an effective procurement strategy and improve the quality and delivery of supply chain activities.request free proposal

To effectively understand the suppliers and devise a robust supply chain management plan, the client approached SpendEdge’s supplier relationship management experts. SpendEdge’s supplier relationship management experts further help clients leverage the use of supplier capabilities to deliver cost savings and reduce supplier risk exposure.

The Procurement Pain Point and Insights Offered

A renowned client in the automotive industry was facing predicaments understanding the competitors and devising an effective competitive strategy to retain their foothold in the automotive industry. The client further wanted to understand and profile their suppliers and understand the typical risks associated with the key suppliers. The client further wanted to understand the possible impact of supplier risk management on the supply chain. Furthermore, the client also wanted to retain a long-term relationship with their suppliers.

To improve the supplier performance, SpendEdge’s team of supplier relationship management experts followed a two-step research approach comprising of interviews and discussions with leading suppliers in the automotive industry. Also, the team of experts further collated information from various proprietary sources such as paid industry databases, industry forums, company presentations, and newsletter in the automotive industry.

After assessing the recent trends and challenges impacting the automotive landscape, SpendEdge’s analysts helped the client manage procurement at the strategic level. SpendEdge’s supplier relationship solution also helped the client devise a more collaborative approach and develop a robust relationship to generate value in terms of innovation and efficiency.

Key questions answered in this cost analysis include

Supplier relationship management-SP

Business Outcome

With the help of this supplier relationship management study, the client was able to collaborate with key suppliers and optimally reduce costs associated with procurement. Also, the solution offered enabled the client to increase innovative power, reduce working capital, and prevent reputational damage. Furthermore, the engagement also helped the client monitor the supply chain, shorten time-to-market, increase supplier service, and improve product quality.

Want to know more about our supplier relationship management study on the automotive industry?

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Procurement Challenges in The Automotive Industry

Players in the automotive industry have an extremely diverse requirement in terms of materials, components, and auto parts that are procured from multiple suppliers. This results in a higher sourcing complexity and gives rise to several procurement challenges. In the automotive industry, the manufacturers don’t rely on one single supplier; instead, they have multiple suppliers and vendors for the same part so as to avoid worst case scenarios such as product recalls, defects, and other SE_Demo2unfavorable occurrences. The chief procurement officers (CPOs) across organizations believe that the procurement team must have professionals from diverse backgrounds, which helps them to leverage a wide range of skills and capabilities that enables them to conduct business with fair-minded suppliers and ensure effective supplier relationship management.

Automotive Industry and its Procurement Challenges in A Nutshell

Several procurement challenges faced by the automotive industry are a result of adherence to strict regulatory and compliance frameworks, the changes in market conditions, inefficient supplier relationship management, growing competition, rising costs, and quality check issues among others. The automotive manufacturers are plagued with high-cost pressures, globalization, and rising market competitiveness, which hinders the smooth functioning of the procurement department. Out of the many procurement challenges, the automotive industry also dabbles with supply chain management related issues such as optimizing logistics, ensuring fast and timely delivery to customers, and enabling cross company procurement of innovative technologies. The increasing cost pressure and supplier pressure is one of the major procurement challenges in the automotive industry, which compels organizations to devise ineffective pricing strategy as these costs can’t be controlled and depend solely on market competitiveness and demand-supply factors.

How to Overcome the Procurement Challenges in the Automotive Industry?

The automotive industry can leverage procurement intelligence, spend analysis services, and contract management tools to overcome the procurement challenges in the automotive industry. To resolve supplier and product related procurement challenges, manufacturers can either

  • Severe ties with the particular vendor in case of defects in outsourced products
  • Establish product design and development protocols in case of in-house manufacturing

 

In the automotive industry, procurement departments must leverage strategic sourcing services, ensure an efficient supplier relationship management, and follow the industry best practices to mitigate potential supply chain risks and drive organizational profitability. The automotive procurement teams must also be empowered with procurement intelligence and spend analysis tools that help them to measure production and manufacturing costs, warrant product safety and quality, and ensure regulatory compliance.

To know more about the procurement challenges in the automotive industry

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Home Care Products Manufacturer Leverages Procurement Market Intelligence to Identify Potential Supplier Risks and Take Timely Decisions

Category Overview

The home care products industry is growing considerably due to the growing health awareness, increase in per capita income of people, and improving standards of living. Additionally, the availability of a wide range of products and variation in product prices is also fueling the growth of the home care industry.

According to Spend Edge’s procurement market intelligence experts, home care products firms are finding it increasingly difficult to maintain standards and monitor practices across all employees and suppliers. As a result, many home care products firms have started opting for procurement market intelligence studies to identify potential supplier risks and take timely decisions. Moreover, the procurement market intelligence studies offered by SpendEdge also help home care products firms identify metrics for a superior supplier relationship management.

The Procurement Pain Point and Insights Offered

A leading manufacturing firm specializing in home care products wanted to assess the overall market dynamics and gain insights on the key drivers and niches. They also wanted to gain an overview of suppliers and their diversity across the supply chain. Furthermore, the home care products client wanted to evaluate risks, compliance, and responsibilities of the suppliers and take timely decisions.request free proposal

The procurement market intelligence experts at SpendEdge carried out an in-depth industry analysis, including primary and secondary research coupled with qualitative and quantitative data collection methodologies, to cater to the specific category requirements of the client. During the course of this competitive intelligence study, the home care products client was able to gain an in-depth understanding of the risks affecting suppliers across the supply chain. Additionally, they also gained insights about the pricing and cost structure of the suppliers through SpendEdge’s price model analysis.

Key questions answered in this procurement market intelligence study include

home care productsBusiness Outcome

This procurement market intelligence study helped the home care products client identify potential supplier risks and take timely decisions. This helped the client save massive amounts in their procurement operations. Additionally, the recommended metrics for a superior supplier relationship management helped them serve their customers better.

Want to know more about our procurement market intelligence solutions?

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