Supplier management has evolved from basic recordkeeping and scorecarding to a strategic practice focused on the management of supplier information, performance, compliance, and risk. Strategic supplier management programs can improve visibility and collaboration, consolidate spend, and reduce quality issues. In this article, learn the three principles that are essential to strategic supplier management and how to make such a program work within your organization.
Supplier management is a broad practice that affects all aspects of the procurement process. Procurement team members invite suppliers to bid on sourcing events, collaborate with them on contract negotiations, and, most importantly, rely on suppliers each day for the goods and services that drive business operations. Because of the pervasive influence the supply base now has, strategic supplier management is a corporate mandate instead of an optional program.
Supplier management has evolved from basic recordkeeping and scorecarding to a strategic practice focused on the management of supplier information, performance, compliance, and risk. By implementing supplier management programs and tools, market-leading organizations across all industries have created deep relationships with suppliers that mutually benefit the parties through cost savings and, in some cases, net-new revenue opportunities. Supplier management programs can improve supplier visibility and collaboration, reduce quality issues, and consolidate spend with more strategic suppliers;1 they can also bolster corporate initiatives, such as corporate social responsibility programs and diversity spending efforts.
How have best-in-class organizations created a level of transparency across their supply base to ensure that suppliers perform to the same standards they expect from their own business units? This article will explore the three principles that are integral to strategic supplier management and provide guidance on how to put them into practice at your organization.