Supplier Management Best Practices

One of the crucial business processes for large enterprises is effective supply chain management. Managing a global supply chain can be a daunting task. A smooth 2-way flow of information between the 2 parties is the foundation of an, effective business relationship.

 

supplier management best practices

 

The basic premise of effective supplier relationships is that every supplier has a different level of importance and must have a different priority level as well. On the other hand the nature of products and services also play a key role in strategizing the supplier relationships.

Customized solutions need to be developed for managing relationships with  different sets of suppliers.

Your Supplier On-Boarding Checklist

Here are some essential tips:

Setting Objectives

The key objective of effective supplier management is to reduce business procurement costs. The second most important objective to is to ensure that there is a consistent flow of goods and services to the end consumer.

Cost Evaluation

One of the key goals of any supplier management system is to understand the costs associated with each supplier. One can analyse the cost associated with each supplier. One can analyse the price charged by each supplier and compare it with that of other suppliers. This is helps in optimizing the cost of each supplier and  who provides  the best cost.

Defining The Process

Creating definite processes for supplier management is important for managing each one of the suppliers effectively. The process once defined, must be adhered by both the parties.

This helps in developing a business relationship that is mutually beneficial in the long run.

Service Level Agreement

A service level agreement is important for a successful buyer-supplier relationship. Having verbal agreements have higher chances of a dispute or confusion later on. An SLA helps in resolving the issues that arise between a buyer and a supplier. The document acts as a ready reckoner for dispute resolution, while it also acts a s legal proof of the business relationship.

Information Management  

The faster the flow of information between the  buyer and the supplier, the easier it will be to manage the inventory of goods and service effectively. One should ensure that all the requisite information is shared with the suppliers in a timely manner – so that they can make the deliveries according to the desired quality and standards.

Requirement Planning

This is essential for efficient management of suppliers. Analysing the demand and supply of goods and services, on a regular basis helps in planning the requirement well in advance. This helps the supplier deliver the right quantity at the right time. Planning improves the overall efficiency of the procurement process. This in turn helps in improving the ROI of the overall business process.

Automate Accounts Payable And Receivable Management

Addressing Supplier Concerns

The concerns of each and every supplier must be addressed. The problems that your vendors are facing must be resolved. This helps in removing the bottlenecks of the system. Building cordial relationships with suppliers is helpful in effective supply chain management.

 Automating the SRM Process

The process of supplier management can be automated with the help of customized solutions like Invoicera. Here are some kinds of solutions that Invoicera provides:

  1. Complete B2B communication management
  2. Automated invoicing solutions
  3. Integration with legacy CRM and ERP software
  4. Custom workflow management software

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