Supply Base Management is different from “Spot Supplier Management”
It is clear that a majority of organizations continue to struggle with some aspect of supplier (or vendor) management and should consider moving from a spot supplier management to supply base management. What is meant by this? Consider the following –
Whether it be working with critical suppliers or just trying to on-board suppliers that may only be used once, they play an important role in helping an organization execute its strategic vision and mission. So given their potential impact on both tangible financial goals and intangible values like corporate image, the ability to achieve success has gone beyond just beating them up and driving down cost through three bids and a buy approaches. Understanding what a supplier is, why a supplier is being used and their importance to the business, requires the capabilities to understand all the dynamics of the supplier relationship.
But to do this successfully requires a fundamental but often overlooked ability to manage the entity or entities that one calls a “supplier”. In other words, given the frequency of changes to an organization’s supply base, most organizations fail in their ability to accurately track and manage changes based on existing processes and inadequate technology infrastructures.
So whether you use the term supplier management, supplier relationship management or even supplier lifecycle management, just saying that you have implemented a supplier centric solution is not enough. Visionary organizations understand that the best way to overcome supplier management challenges is by adopting a technology platform that can provide a 360 degree aspect of all their supplier relationships on many different dimensions (i.e. parentage, tiers, geography, etc) and master data governance. This approach also entails a platform grounded in an ability to meet business requirements while providing IT an ability to easily integrate into an existing technology framework.
Therefore to achieve a successful integration of the two requires the adoption of “supply base management”. Supply base management drives towards supplier management excellence in key areas that clearly differentiate it from spot supplier management approaches (e.g. supplier information, supplier performance, risk or compliance centric solutions alone).
Supply base management technology allows organizations to successfully manage suppliers by –
- Creating a data model that can easily define characteristics and ensure quality and security standards
- Developing comprehensive yet simple and fast implementation approaches
- Workflow designed for accuracy with minimal manual input and ease of use
- Capabilities for quick and easy integration while ensuring data integrity
- Exceptional match, merge, and duplicate handling to maintain clean supplier master
- Modular design for deployment and configuration flexibility
- Dynamic scripting to deal with the most complex needs
- Full document management, versioning, and reporting
- Search and retrieval capabilities for flexible and comprehensive searches
- Flexibility in the deployment of the solutions such as on-premise, cloud or hybrid approaches
Tempting bells and whistles can create excitement for potential end users during a demo, based on functionality that may be used by only a few customers, or even still in a development phase. But what appears to be appealing and sexy in a demo may in the end be “smoke and mirrors” that lacks the scalability in an enterprise environment. In the end, without a technology infrastructure built on flexibility and data design such as through supply base management, hopes of obtaining a holistic view of suppliers will be dashed.