Managing supplier relationships

How important is the relationship you have with your suppliers? What would happen if the relationship faltered? How often do you refresh or appraise supplier performance? How do you measure that? What is the risk to you if the supplier “disappears” overnight? Is the risk material, or just politically embarrassing? With Proactis, suppliers can be constantly appraised for how appropriate they are to supply to your organisation. The result is visible, risks are identified and the process is auditable. Communications such as checking payment details or account information, changing contact details and updating catalogues are all done online. Much of the relationship management workload is returned to the supplier with self-service functions.

Supplier grading
It is important to define corporate standards or benchmarks against which suppliers can be measured. Such business rules may be set at supplier level or for individual contracts. Periodic review of suppliers or contracts can be prioritised according to risk, and the standing of the supplier re-stated as necessary. Organisation-specific rules can be defined and validation limits set.

Supplier performance measurement
As the relationship with a supplier develops, the number of interactions will increase and a trend or historic record will emerge. The way that a supplier performs against their promises or your expectations will ultimately determine whether you should continue to do business with them. Where there are a number of suppliers delivering similar products or services, Proactis can compare supplier performance and, similarly, when collaborating with other buyers, see how the supplier works with them.

Supplier visibility
The impact of supplier interaction on other departments in an organisation is material. Whether for a simple “where is my payment” inquiry, a full update of the price-list or catalogue, or the transaction either manually or electronically. With Proactis, much of the workload of managing supplier relationships can be handed back to the supplier to allow them to self-serve – both for information requests and transaction delivery. All of this can be effected without compromising the corporate firewall and, once set-up, requires no buyer involvement. Suppliers enjoy the information flow without the need to chase the buyer, buying organisations benefit from dramatic savings in Accounts Payable and associated processes.

Read more