What Is Strategic Supplier Management?
Perhaps one of the toughest tasks of all in the entire supply chain and procurement process is mitigating the human factor and evaluating the relationships you have with your suppliers and strategic partners. Supplier management is not talked about nearly enough as other procurement processes or management, yet it is still a critical aspect of the entire chain.
One aspect of the procurement process that many companies loath to take to a digital format is supply chain management because they very often have a person on staff who is a whiz at negotiations and maintaining excellent supplier relationships.
However, while using supplier management software, you can still keep the human factor—it just streamlines the process.
Read on to learn more about strategic supplier management, why it’s so important, and how strategic suppliers differ from other suppliers you may be working with.
Strategic Supplier Management: Who Are Strategic Suppliers?
Strategic suppliers are likely your most long-term suppliers and/or someone who provides a good or service that is tough to get anywhere else or they provide an ingredient that is critical to the success of your product or service. For this reason, this may be a tricky relationship to maintain, depending on the nature of the relationship.
Hopefully, you have a friendly, long-term relationship with your strategic suppliers where you’re not tempted to go against any of your ethics, which are so fundamental in procurement.
Beyond strategic supplier management, you also have your preferred suppliers. These suppliers also have an ongoing relationship with you, and you prefer them over others, but they may not be your most strategic.
Lastly, there are your vendors or approved suppliers. These may be suppliers you approve of for a one-time transaction or those you turn to in a pinch—but not suppliers you have an ongoing relationship with.
Strategic Supplier Management: Managing Risk
If one of the primary features you’re in search of when it comes to strategic supplier management is methods for managing procurement risks, vendor management software is a good option to help manage risk while also offering supplier management solutions to help keep things organized and in one place. Some actions that software can do include:
- Onboarding new vendors. Instead of manually adding a new supplier into your ERP system, adding a new supplier is simple with the right software.
- Contracts and compliance. Software is an easy way to keep all of your contracts in one place, to keep an eye on important dates, and to make sure compliance is followed. You can also compare and contrast any risk factors for suppliers before onboarding.
- Project onboarding. If you’re beginning a similar project to one you’ve just completed, you can copy similar traits over instead of having to start from scratch.
- Strategic supplier management. You can tag or mark suppliers by preference, so you can keep a record and history of supplier performance.
The right software can help not only with strategic supplier management but also with eSourcing and other procurement processes as well.
If you’d like to hear more about vendor management or other types of software, or would like to request a free demo, contact EC Sourcing Group today by calling 973-936-9672.