Industry 4.0’s global and ultra-competitive business environment leaves no room for imprecise, resource-intensive, and error-prone manual supplier management. Delete the spreadsheet in favor of an automated supplier relationship management (SRM) system and lock in long-term cost savings, reduce risk, and bring unprecedented efficiency to your supply chain operations.
A strategic approach that incorporates robust supplier management software turns vendors into partners, fosters diversity, and ensures reliable sourcing. Most critically, equipping your business with an SRM system allows you to categorize suppliers and apply diverse guidelines to each. For instance, a customized supplier management system might remind finance and procurement teams to frequently review inventory levels and reorder points for critical spare parts, while robotic process automation would be sufficient for overseeing high-volume materials. Similarly, you could program the SRM software to routinely search for lower-cost suppliers of commodities like fasteners, filters, lubricants, and solvents.
Centralizing supplier data, contracts, catalogs, service level agreements, and other administrative guides within an SRM system empowers maintenance, repair, and operations and e-commerce teams to compare performance and establish baselines for selecting and replacing suppliers based on quality, delivery time, unit cost, and other metrics. With objective standards in place, businesses can leverage supplier management software to streamline their workflow. To gain the full benefits SRM systems can deliver, look for robust solutions to your most pressing organizational challenges:
Customization and Scalability
Every business is different, so companies need SRM systems that can adapt to their workflows and grow along with them. Adopting supplier management software that accommodates today’s needs and can be easily expanded to meet tomorrow’s higher volume is essential for building a future-proof strategy. Scalable products minimize the disruption and costs associated with system overhauls and add-ons that companies unprepared for growth must incur.
Businesses set themselves up for supply chain success when they implement supplier relationship management systems that offer “set it and forget it” features. Computer functions automate repetitive activities and apply rigid rules to arrive at decisions regarding routine tasks:
- Payment Processing: Robotic processes make it easy for users to collect, store, and retrieve new suppliers’ information. Procurement teams can tailor the information the SRM software collects and the tasks it performs, such as reconciling invoices against purchase orders, verifying employer identification numbers and bank routing numbers, and scheduling payments based on due dates.
- Report Generation: SRMs aggregate data from across the company and assign expenses to the proper department or project cost center. Decision makers can readily see up to date spend analysis and report cards detailing each supplier’s delivery times, compliance with contract terms, price progressions, and more.
- Version Control: Supplier relationship management systems ensure all business units base strategic decisions based on a single version of the truth. Centralized data management enables instant updates on inventory levels which trigger automated reorders. Just as important, these platforms update parts catalogs and synchronize them with internal processes as they are published.
Supplier Management Integration
Of course, supplier management software can only transfer data to and from other areas of the business when it can communicate with other tech stack components. Integrating supplier-related and -generated insights dissolves data silos and lays the foundation for more holistic and efficient supplier relationships:
- Enterprise Resource Planning: Procurement, inventory, finance, and other supply chain components to seamlessly flow purchase orders and invoices through the process and keep inventory reports and financial positions current.
- Customer Relationship Management: When supplier data aligns with sales and marketing efforts, procurement teams can ensure sufficient inventory to fulfill increased demand spurred by promotional efforts.
- Quality Assurance: Quality management systems and SRM systems share much of the responsibility for delivering consistent output and merchandise on which retail and manufacturing businesses stake their reputations. Integrating and rostering data sharing between these functions creates a comprehensive scheme for identifying and mitigating potential quality issues that pose reputational and safety risks.
SRM systems create synergies among manufacturers, resellers, and suppliers, empowering innovation and market responsiveness. They allow business partners to share best practices, and efficiencies that simplify operations across the supply chain. These insights then drive real-time cohesion, which makes all parties more profitable and resilient in the face of demand shifts and supply chain disturbances.
Businesses that adopt comprehensive supplier relationship management integration gain full visibility into their supply chain. They will discover cost-cutting and productivity-boosting process improvements. They become more collaborative and exist in a more nurturing environment where efficiencies benefit all stakeholders.
Must-Have Features
SDI offers a full range of supplier relationship management services and can advise clients in all industries on selecting, customizing, integrating, and operating their SRM systems. Our professionals have prioritized the features and benefits our customers find most appealing in their supplier relationship management systems:
- Supplier Selection and Onboarding: Maintaining a centralized repository for evaluating and integrating new suppliers. References wholesale data handling, extraction, and analysis to evaluate all components of each supplier’s capabilities, ranging from pricing schemes to quality measurements and delivery performance.
- Supplier KPI Tracking: These services continually update and apply real-time indicators and automated rating instruments to impartially judge current suppliers’ performance. The platform generates scorecards and user-friendly dashboards that monitor delivery timeliness, quality conformance, and cost efficiency.
- Contract Management: An SRM system earns its keep by ensuring suppliers comply with purchasing terms and employees follow established requisition protocols. These tools double-check invoices against orders, catalog prices, and discount offers to ensure accuracy. They uncover areas that drive up costs and suggest alternative sourcing and negotiating tactics that minimize expenses.
- Risk Management: Supplier management software incorporates advanced analytical tools to watch for signs of increasing risk. Declining financial health, operational threats, and shifting geopolitical situations all carry the potential for increasing costs, adding sourcing complexity, and disrupting supply.
Talk to SDI’s supplier relationship management experts to learn how our comprehensive services and consultations create unbeatable supply chain solutions across your entire enterprise.
