Category Archives: Supplier Information Management

Visibility is Key to Managing Suppliers

For the first part of this week, we have been talking about the significant overlap between sourcing and supplier management and the necessary platform elements needed to support both. Key elements included performance, relationship, and risk management, because all are necessary for sourcing and supplier success.

Spend Matters recently ran a 3-part series on a sub-set of the issue, based on a recent interview with Ecovadis, that talked about how Visibility is Key to Managing CSR Risks in Indirect Spend (Part I, Part II, and Part III). But visibility is needed for more than just addressing risks in indirect spend. It’s also needed for addressing risks in direct spend.

Direct spend has all the same risks, they just aren’t one step removed through an intermediary. And you have to trace all of the products down to the raw materials to identify not only in your supply base, but your supplier’s supply base, their supplier’s supply base, and their supplier’s down to the mine, the farm, or the harvester.

But it’s not just the suppliers you need visibility into, it’s the environment that surrounds them. After all, a natural disaster can cut them off. An economic downturn can render them bankrupt if the currency they do business in (and keep the majority of their cash on hand in) crashes. A geo-political uprising can cut them off at the border. A port strike can cut off their primary shipping routes. And so on. You need a full 360-degree view around the supplier to ensure success.

But how do you get that? You can’t watch everything everywhere, and when you consider the extent of the global supply chain, you almost have to.

That’s why it’s key to have a platform that can integrate with 3rd party sources as you will need to integrate dozens, if not hundreds, of data sources to keep on top of all of the data you need to populate the models to evaluate and track the risks.

And that’s why two of the key elements we look for in a platform are integration and dynamic data model extensibility. You never have enough data. Without the right data, you don’t have the visibility, and that’s key to success. Or at least to preventing major unexpected disruptions.

Digging Into Significant Sourcing Supplier Management Synchronization Part II

Earlier this week we started to describe the second most significant change to the upcoming Q2 Release of the Spend Matters Solution Map, and that is the introduction of a new common sourcing – supplier management section because you can’t do sourcing without suppliers and you don’t manage suppliers without the ultimate goal of doing business with them

This new section contains the following common sub-categories:

  • Enhanced Information Management for discovery and onboarding
  • Performance Management for tracking performance
  • Relationship Management for managing the relationship
  • Risk Management for keeping tabs on, and managing, the risk
  • Enhanced Portal for information management and collaboration

Our first post explained why these sub-categories were relevant. In our last post we covered the first three sub-categories. Today we’re going to start discussing what’s important to consider in the remaining two categories.

So what are the key capabilities we’re looking for in the risk management and enhanced portal sub-categories?

Risk Management

  • Assessment because if you can’t assess a risk, you can’t properly identify the magnitude of the risk and the need to monitor it
  • Mitigation Planning because credible risks need to be planned for and mitigated
  • Model Definition to allow you to quantify both the likelihood of the risk and the expected cost should the risk materialize
  • Monitoring & Identification to allow for the events that could (potentially) materialize to be monitored for and detected
  • Regulatory Compliance to quantify the extent to which the platform can track compliance requirements and a supplier’s ability to conform to them
  • Supplier Risk Management to model overall supplier risk based on assessment, models, external monitoring, third party data, compliance, and performance

Supplier Portal

  • Information Management to allow a supplier to maintain, or at least comment on, their data (and data related to them)
  • Performance Management to allow a supplier to respond to their performance review’s and conduct 360-degree reviews on the buyer
  • Relationship Management to allow the supplier to raise issues, respond to issues, and collaborate on corrective action plans
  • Collaboration to allow full interaction and feedback

These are also all key capabilities for sourcing and for successful supplier management.

Digging Into Significant Sourcing Supplier Management Synchronization Part I

In our last post we started to describe the second most significant change to the upcoming Q2 Release of the Spend Matters Solution Map, and that is the introduction of a new common sourcing – supplier management section because you can’t do sourcing without suppliers and you don’t manage suppliers without the ultimate goal of doing business with them

This new section contains the following common sub-categories:

  • Enhanced Information Management for discovery and on-boarding
  • Performance Management for tracking performance
  • Relationship Management for managing the relationship
  • Risk Management for keeping tabs on, and managing, the risk
  • Enhanced Portal for information management and collaboration

And our last post explained why these sub-categories were relevant. Today we’re going to start discussing what’s important to consider in each of these categories.

Enhanced Information Management
There are three main categories of functionality we are looking for:

  • Discovery and the ability to find suppliers beyond the platform
  • On-boarding Support and the ability to get new suppliers quickly into the platform
  • Supply Base Profiling and the ability to create holistic supplier profiles

Performance Management

  • KPIs and the ability to define and manage them
  • Preferred & Blacklisted Suppliers and the ability to define and manage them appropriately

Relationship Management

  • Issue Management and the ability to define, track, and manage issues
  • Plan Management and the ability to define, track, manage, and resolve plans to manage and resolve issues

These are all key capabilities for sourcing and for successful supplier management. Tomorrow we’ll review the last two joint categories.

Significant Sourcing Supplier Management Synchronization

Over the last couple of weeks we’ve been laying the foundations for the significant changes coming in the upcoming Q2 release of Spend Matters Solution Map, with the new common-foundations and the Sourcing, Supplier Management, and Analytics Maps designed by yours truly, the doctor of Sourcing Innovation.

While the biggest change was the introduction of a new common platform section, which evaluates solutions based on the underlying platform (which is becoming more and more important now that more players are offering “suites” and the longevity of a platform without a good platform is limited), the next biggest change is the introduction of a new common section that overlaps sourcing and supplier management because you can’t do sourcing without suppliers and you don’t manage suppliers without the ultimate goal of doing business with them. (And while this is not yet common to e-Procurement, it may soon be a common requirement for any catalog providers as more and more such providers offer enhanced supplier management and interaction.)

So what are the common elements that one needs to consider?

  • Enhanced Information Management for discovery and onboarding
  • Performance Management for tracking performance
  • Relationship Management for managing the relationship
  • Risk Management for keeping tabs on, and managing, the risk
  • Enhanced Portal for information management and collaboration

And why are these important cross application elements?

  • Suppliers are the life-blood of your organization, but they don’t consistently perform over time and new suppliers are sometimes vital. That’s why discovery and on-boarding are so vital.
  • The key to good performance from your suppliers is monitoring and managing that performance.
  • The key to correcting performance and preventing problems in the first place is often the result of good relationship management.
  • The key to preventing unexpected supplier-based disruptions (which affect a significant number of supplier chains every year) is to keep a tab on risks and prepare for the significant ones with mitigation plans ready to go.
  • They key to keeping information up to date is to let the supplier help you with a portal that is built to do so (and that they want to use).

So what should you look for? While we won’t dive into every detail (but you will be able to with a custom Solution Map if you want to (just contact Spend Matters to find out more), we will highlight some of the more important details ( so you can know that when we evaluate a vendor’s technology, we truly evaluate the technology from the point of view of a technology analyst, not an industry analyst (see our recent post on Industry Analysts vs Technology Analysts) and this is absolutely critical if you want to select the right technology.

Supplier Solutions – All About the Space … (Repost)

… of Supplier Enablement. In our recent post about Supplier Networks, we discussed the value wasn’t what the provider typically promoted, but the fact that it greatly decreased the effort required by the supplier to do business. It enabled them to be efficient, whereas most sourcing and procurement applications just suck their time.

So if you are going to buy a supplier management solution, then it better be one that truly, truly, truly enables suppliers. So what does this mean?

Find a solution that focuses suppliers on missing, outlier, and information that can’t be confirmed.

Many solutions just send out regular “please review and correct” alerts and call that supplier information management. But information management isn’t about reminders and checking boxes, it’s about finding issues and fixing them. A good solution identifies missing information, information that is outlier from norms (i.e. an insurance certificate is usually only 1 year, but the supplier entered 10), and information that can’t be confirmed (such as third party audits from organizations that can’t be found in government registries).

Find a solution that makes integration with supplier’s systems (MRP, CRM, order management, etc.) easy.

Suppliers need to quickly get POs out of your portal and into their order management, MRP, ERP, accounts receivable, etc. system for which your vendor will likely not have an out-of-the-box integration solution that you are able to implement on behalf of your supplier. So make sure the solution has a well-defined API that makes it easy for the supplier to integrate their systems if they want to and well defined file formats that will allow them to export orders, etc. from your system and import shipping notices, invoices, etc. from theirs.

Find a solution that includes cash forecasting capability for the supplier based on your early payment discounting schedule.

Face it. A supplier isn’t going to go for your early payment discount program just because you say it’s a good idea — they need to run their own numbers and realize that 2% is less than they are paying in interest, etc. Give them an easy to use calculator, especially since their Procurement or AR guys are likely NOT as financially adept as your financial modellers.

In other words, if you want a true supplier solution, find one that truly, truly, truly enables the supplier. Not just you.