How Firms Use eSourcing to Optimize Their Supply Chain Networks
One of the most important things that a business needs to do is keep its supply chain healthy. If there’s a break in the chain, this can negatively affect business in several ways. A good example is when the big box store Target had to suspend operations in Canada when they began to experience supply chain problems. eSourcing in the supply chain is a great way to mitigate and optimize networks and to keep them seamlessly flowing without interruption.
Read on to learn more about how optimization saves time in eSourcing and how you can use this to your advantage.
Benefits of eSourcing in the Supply Chain
While there are particular benefits that occur when you use eSourcing and optimization, there are general benefits that ring true for any company that apply this method to procurement management. Some of the more general benefits of eSourcing in the supply chain include streamlining the areas of:
- Obtaining services and goods, at the best prices for your operational reality
- Identifying and scrutinizing potential new suppliers to meet demands
- Negotiating and implementing new contracts, and keeping tabs and updates on old contracts as well as their milestones and due dates
- Monitoring ongoing relationships with suppliers
Specific Benefits of eSourcing in the Supply Chain
As you become more familiar with eSourcing, you’ll find that there are more direct benefits, particularly in certain departments. Both operations and finance will like the outcomes or generate better results for finance and operations when you optimize eSourcing. The software has built-in accounting functions that give you better visibility into your spending and habits, including data that identifies your purchasing trends, strategies for working with suppliers, how you can save money, and market conditions that could negatively or positively affect your situation. Thus, optimization is a must.
The software is intuitive if you can optimize it for what your need level is. This includes incorporating risk in how you optimize eSourcing (predicting market conditions is a good example).
Other Functions of eSourcing Software
You can further use optimization and eSourcing in the supply chain by also using the software to perform other functions. If you’re not optimizing it to the fullest, then you’re not realizing its full potential and how it can help you.
eSourcing without optimization is like pasta without red sauce—it’s edible but not great! Some other functions of eSourcing software include:
- Second or third round bids with feedback
- One version of the truth for all to see
- Reverse auction functionality
- Contract management
Essentially, using optimized eSourcing in the supply chain can help take your procurement management to the next level and remove many of the headaches you experience dealing with contract management and suppliers. It can also improve your relationships with suppliers as well by being able to see their deadlines, distribution data, and other factors that allow transparency and foster better communication. eSourcing saves money and also saves time, which in the end saves you money as well.