The majority of businesses need to work with external suppliers at some point in time. Yet finding the right supplier with a competitive price and good availability can be a challenge. Here’s how supplier management solutions can make the difference.

Supplier management solutions and associated software is ultimately about establishing a streamlined process for sourcing and working with suppliers. Businesses will often have multiple types of relationships with suppliers. With some suppliers, they will simply buy goods that are available on the market, and have minimal ongoing relationships with the supplier. Ongoing relationships or partnerships are where agreements or contracts are in place, whereby a business gives certain suppliers a ‘preferred supplier’ status. Some companies go a step further to create alliances, which is often a long-term relationship where a supplier and company collaborate closely.

Even if a business has a set of go-to suppliers, it always makes business sense to ascertain that these suppliers are the right fit for a business on an ongoing basis. This is to ensure costs and the products or services delivered remain competitive and of the required quality. There are also always situations whereby a business needs to source new suppliers, whether on an ad hoc or on an ongoing basis. These are all reasons why supplier management solutions are absolutely critical to business success.

Supplier management solutions help to consolidate the several steps usually required to bring a new supplier on board. This starts with evaluating suppliers to ensure they have the means and abilities to provide products or services of the required quality. Then there are the internal processes needed to set suppliers up on systems, and establish processes for working together. Many businesses also need to segment their suppliers for business resilience reasons, while deciding on the level of partnership is also necessary. Finally, all supplier relationships should go through an evaluation process to ensure both deliverables and business results are being met. Supplier management solutions can help with all of these areas.

Here’s a closer look at the key benefits of supplier management solutions.

Competitive Costs

The onboarding processes that supplier management solutions can support mean that you are reassured that suppliers are offering market value and competitive costs. Setting up new supplier relationships cost businesses time and money, so following an adequate process to identify them means the suppliers you work with are likely to have longer term relationships with you. This also saves money in the long run. Clarity on the nature of your relationship with suppliers, aided by supplier management solutions, means you should also not experience issues, delays or availability problems. This saves money on having to find temporary solutions if and when issues arise with suppliers who haven’t gone through this diligent process.

Efficiency

The rigorous process offered by supplier management solutions ultimately means you should experience greater efficiency once you identify the right suppliers. Most businesses which work with carefully identified suppliers on a longer-term basis experience fewer issues and slicker work processes, due to the mutual understanding that comes from closer working relationships. Generally, the operational flow and the supply chain all become smoother as a result of implementing a supplier management solution.

Business Security

A matter of critical importance, business security is also something that supplier management solutions can support. Creating robust contracts with carefully selected suppliers means you can agree to terms such as fixed pricing, or scaled increases in line with inflation over a number of years. This means that businesses cannot be caught out by sudden increases in costs from their suppliers. It’s a win-win situation, because suppliers can gain guaranteed business for a set time period, while the companies they work with get the financial security they need to thrive.

Effective Supply Chain

Often, the support of supplier management solutions can help businesses reduce the overall number of suppliers they work with. Finding suppliers that can meet multiple business needs often brings better pricing structures, and makes everything from invoicing to logistical processes easier to handle. This creates more efficient processes, and often more environmentally friendly ones too, which can help with any sustainability goals a business might have. The financial management of working with fewer, trusted suppliers means that there is also a lower likelihood of issues such as invoicing fraud.

Strengthened Workforce

Working with the right suppliers is sometimes even better for a business than having in-house staff to fulfil particular roles. Finding a good supplier management solution can therefore mean that internal teams of staff are tight-knit and fulfil very specific roles. Businesses can invest more in this smaller group of people, rather than spreading themselves too thinly in terms of employee benefits. Highly specified teams who are invested in as people are likely to be more loyal and perpetuate a positive company culture. These are all qualities that can significantly contribute to business success, bringing a competitive edge to a corporation as a whole.