The days of managing suppliers through phone calls and BASS email exchanges are long gone. With the modern supply chain presenting new external pressures and complexities, procurement departments need collaborative and flexible tools to manage the entire supplier lifecycle. The result has been a global shift away from the traditional approach of supplier performance management to the new wave of supplier value management.
What do we actually mean by that term? Supplier relationships are now at the center of procurement with an emphasis on transparency.
Supplier value management technology (SVM) takes traditional approaches to supplier relationship management (SRM) to the next level, integrating with sourcing, contract and category management processes to unlock value across every aspect of your purchasing program. Here are six of the most impactful benefits of SVM technology:
- Manage the entire supplier lifecycle: SVM technology can help ensure potential suppliers are ready to do business with you, and once on board, track whether they meet KPIs for quality, delivery and performance. Having a holistic view of your suppliers makes it easier to identify which suppliers are contributing to innovation and market leadership.
- Improve supplier compliance: Use SVM technology to capture best practices and processes with your team and suppliers to increase adoption.
- Increased visibility: Procurement can group suppliers by a variety of factors, including financial health, category, segment, level of innovation and more. Doing so can help manage each supplier relationship based on its importance to the organization and identify the most strategic partnerships, vulnerabilities and areas for improvement.
- Identify and mitigate risk: Using comprehensive scorecards and real-time alerts, procurement teams can better track problem areas and risk. This information can help identify potential issues and put corrective plans in place before corporate and regulatory guidelines are broken.
- Continuously improve savings over time: Consistently hit savings goals by measuring supplier ability to deliver on negotiated price and contract terms. This visibility can also position procurement to uncover new cost savings by working directly with suppliers to improve delivery terms, production processes and schedules.
- Improve effectiveness and efficiency: Best in class SVM technologies consolidate data feeds and systems into a single view, which eliminates the need for monitoring multiple disconnected systems. Technology also eliminates the need to create and update manual scorecards. Digitalizing these efforts paints a much clearer, more comprehensive picture of supplier health.
Technology is not the cure-all for the challenges and complexities procurement teams face, but it can certainly help them make significant leaps and bounds in improving processes and impactful results.
Curious about what types of SVM technologies are out there? Learn more about BravoSolution’s supplier value management solutions, or calculate how much more value your organization could generate with a more supplier-centric approach.