Keys to Successful Supplier Management
Supplier Management requires insights that enable organizations to engage suppliers, mitigate risk, boost supplier performance and encourage collaboration and shared intelligence to drive improvement from source to shelf.
Delivering on your customer promises begins when suppliers deliver on time and in full to you. You do not want to disrupt your production schedules, tarnish your company brand or your customer's experience because of supplier disruptions or inferior product quality.
Optimizing supplier management is key to instilling confidence throughout the supply chain that you can deliver as promised.
SAP capabilities in ECC, S/4HANA and, Ariba cover the global, integrated, source-to-pay process. The integration of these solutions includes guided buying, collaborative sourcing, contract management, operational purchasing, supplier information, master data, inventory management, plan-driven procurement, supply determination, supply management, and payables management.
What Effective Supplier Management Looks Like
Effective Supplier Management harnesses real-time information, equipping organizations to make faster, more informed supplier risk management decisions that prevent supply disruption. By enabling a supplier management framework, company spend is directed to preferred suppliers and using metrics to identify those that consistently underperform, organizations can plan for more dependable supply sources. Utilizing SAP functionalities, including quota arrangements, allows you to automate your fair share rules across multiple supplier relationships.
Integrating supplier management with other procurement processes leads to reduced cycle time and improvements in performance, speed, visibility, and control.
Challenges of Supplier Management
Monitoring and evaluating suppliers can be complicated and time-consuming. All too often supplier data is siloed and maintained in disparate systems including spreadsheets, that quickly become inaccurate, out dated and often can be very subjective. Without a single source of truth, and an understanding of how to use reporting and scorecards it is impossible to determine whether suppliers meet their commitments or whether we fully understand the supply chain's cost and value.
Put succinctly, you can’t manage what you don't know, and that opens you up to losses and risks, diminished productivity and efficiency, and potential service interruptions. More troubling, a lack of understanding available data and metrics can reduce the ability to react quickly to sudden challenges, a spike in demand, a product recall, or a regulatory ethics violation. And that places you at a competitive disadvantage and can cause financial and material loss.
The Reality
Supplier Management helps deliver efficient processes, strengthens your relationship with reliable vendors, and identifies those that aren't performing, providing an objective case for improvement or securing alternative sources. Also, leveraging SAP and EDI capabilities, you can reduce non-value-add administrative labor costs and errors, help you track and measure performance against contract, and signal potential challenges allowing you to take proactive actions to mitigate the risks of potential supply disruptions.
Whether it’s optimizing supply chain performance or implementing additional SAP functionality, Reveal’s oVo® methodology helps organizations improve internal business processes, educate users and deploy the smart use of SAP to achieve sustainable, tangible value. By challenging organizations to move away from being transactionally driven and move towards information-users that manage the process and apply knowledge, improvements in agility, service, cost, and inventory performance are achieved.
