PROACTIS Blog

How Can My Supplier Relationships Become Friction Free?

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Does doing business with your suppliers feel like everyone's aboard a bullet train — with transactions and interactions taking only seconds?  If not, then perhaps it feels more like you're stuck in the age of steam, where everything shakes, rattles and rolls along painfully slow?
In a previous blog, we asked the question: 'Is your supplier eco-system being hit by a hidden tax?'

Put simply, when supplier eco-systems operate inefficiently, there's a huge 'drag factor' on performance and long-term relationships. Manual, fragmented processes can drain away money, time and talent from Procurement and Finance teams, as well as from suppliers. 

To follow the steam train analogy, there's also the hard graft of trying to keep everything fired up and moving, the hisses of frustrated suppliers and the inevitable breakdowns and delays.

But doing business with suppliers doesn't have to be this way. An ultra-smooth, bullet train-like experience is possible, where everyone benefits.

So how can it happen?
What's needed is a frictionless method of communication, so buyers and suppliers can ride the rails with ease. This means seamlessly sharing secure electronic information and handling transactions simply, on every round trip. As a result, everyone can streamline business processes, improve information quality and reduce administrative costs.

Here are the four steps to achieving this super-smooth approach to doing business with suppliers.

Step #1: Recruitment, qualification and on-boarding
With the right tools, you can avoid re-inventing the wheel every time you need to add new suppliers. Simply tailor a library of pre-defined questions or add new ones — for easy qualification and information-gathering. You can work in a consistent way across groups, scoring suppliers, covering off risks and prioritising the adoption of specific companies. 

A series of invitation mailers can encourage each supplier through the recruitment and on-boarding process and onto your approved supplier list — without endless forms and faxing.  

Step #2: Supplier directory
Most organisations have a supplier directory on a spreadsheet somewhere. But what's needed is a central online repository that contains detailed profiles with a record of all certifications and specialties, branch locations and contacts, plus categories of goods and services supplied.

With secure online access, suppliers can update details themselves instantly 24/7 — removing the burden from your teams. Automatic reminders can be triggered to ensure each supplier remains within their accreditation conditions, for example, when certificates expire.

It should be simple to search the database, feed in your sourcing activities and synchronise with your purchase-to-pay system, so no-one has to enter supplier details twice, ever again. 

Step #3: Supplier interaction
For this to be frictionless, you should embrace a system that steers everyone away from calls, faxes and emails. The answer is a Supplier Network — a portal that provides a single hub for easy two-way communication.

Once logged in, suppliers can update their catalogues, respond to tenders, receive your purchase orders, upload their invoices and check the status of every payment ... and all without having to talk, type or text with a single person. 

Step #4: Supplier appraisal 
With the right tools, you'll be able to check the performance and risks related to each supplier in an instant. So instead of guessing who's doing well or attempting to gather verbal feedback from your buyers, you simply look online at the key performance indicators. 

As a result, you'll know each supplier’s strategic importance to your organisation. You can also enter supplier review meetings with the facts at your fingertips and carry out better-informed negotiations. 

Want to know more?
Register for our webinar: 'Supplier Engagement - How to Lower Costs & Accelerate Business Processes'.

You can also see how to gain full control of the supplier lifecycle - and enrich procurement