Another presentation at the Fourth Annual International Symposium on Supply Chain Management that tackled an important topic was a presentation on Vendor Relationship Management by Tom Hawkett of Connect4Growth.
Supplier Relationship Management is very important in a successful supply chain. When you consider the recent entrenchment of global / low cost country sourcing, the unreasonably high focus on spend management (a topic for another post), that many ERP investments are not delivering on promises (as most companies can only afford limited roll outs and most systems do not come with e-Procurement or e-Sourcing capabilities of any significance), and that the viewpoint prevalent in many organizations still seems to be “Procurement, What Have You Done For Me Lately?“, the need for excellence is paramount. This can only happen if you are able to consistently get the right products, of the right quality, at the right time, and at the right price. This is not likely to happen consistently and without incidence if you do not have good relationships with your suppliers.
So how does supplier relationship management help you?
- Increased Productivity / Improved Performance
- Improved Service Levels, Internally & Externally
- Better collaboration with, and management of, providers
- Reduced supplier selection risk
- Utilization of best practices and governance structures
- Reduced Decision Time
- Cost Savings
No surprises here. So why do so many companies often have problems? Likely because they are faced with one or more of the following challenges:
- Never enough time
- Inundated by supplier contacts
- Everyone is a supplier manager
- Technology allows more stakeholders
- Evaluation processes are longer today
- Difficulty communicating vendor experience across the organization
So what’s the solution? A well designed, accessible, and easy to use Supplier Relationship Management (SRM) or Vendor Relationship Management (VRM) solution that supports and implements best practices appropriate to your organization. A good solution will provide the following capabilities to various degrees:
- establish benchmarks and goals
- ensure deliveries match payments
- flag potential problems
- expose maverick buying
- encourage communication
- track accountability
- speed up information collection
- enable apples-to-apples comparisons and reporting
- provide a framework for partnerships
- document experience in a knowledge store accessible by the organization
- reduce decision times and ensure mistakes are captured and not repeated
Where can you find one? A number of vendors, including Connect4Growth, provide such solutions. Some examples are Vinimaya, Apexon, and SAP. In addition, some e-Sourcing suite vendors, such as Procuri, VerticalNet, and Ariba provide these capabilities in their e-Sourcing suites. Now, it’s true that each of these solutions are different, and attack different aspects of SRM/VRM, but the best of breed solutions are still infinitely better than not having a solution. And since these systems are far from rocket science, even though they can rocket you to success, if you don’t have one, you should consider getting one. After all, you probably already have a CRM (Customer Relationship Management) system – are not your suppliers just as important as your customers?