Reduce Risk During Onboarding with Strong Supplier Data
Introduction
When onboarding new suppliers, risk mitigation is a critical component of the process. By collecting the right supplier data, you can streamline the onboarding process and minimize the risk of doing business with new suppliers.
By identifying potential red flags early in the pre-qualification and selection process for new suppliers, you can avoid costly problems down the road. By gathering and verifying supplier data before onboarding suppliers, you can be sure that you’re dealing with legitimate businesses that pose little risk to you.
Benefits of Supplier Onboarding
Supplier onboarding is a critical process for organizations seeking to mitigate risk and protect their brand. By properly vetting new suppliers, you can reduce the chances of entering into a bad relationship that could hurt your business.
There are a number of benefits to be gained from a successful supplier onboarding process. The most obvious is that it can help you avoid doing business with unscrupulous or unreliable suppliers. But it can also help you ensure that your suppliers are compliant with your organization’s standards, and that they have the necessary resources in place to meet your requirements.
Additionally, a well-run onboarding process can help you build better relationships with your suppliers and create a more collaborative working environment. This, in turn, can lead to increased efficiency and cost savings for your organization.
Different Types of Supplier Data and Their Benefits
There are different types of supplier data that you can use to enhance your risk mitigation process.
Some of this data is publicly available, such as a company’s registration information or financial data. Other data is more difficult to obtain, such as bankruptcy information, or information on past compliance issues. This information is very valuable in assessing a supplier’s risk, and can often be obtained via an Experian Business Report.
The benefits of using this data are twofold. Firstly, it gives you a better understanding of the risks associated with a supplier. Secondly, it helps you to make more informed decisions about whether or not to do business with them.
The key is to use as much data as possible, and to combine it with your own knowledge and experience in order to make the most informed decision possible.
One of the biggest reasons onboarding is so important is because it’s one of your strongest lines of defense against exposing your company to potential risk. You need to develop an onboarding strategy that will allow you to assess and understand the potential risks of doing business with a new supplier.
Setting up a system and identifying the risk factors that are most important to your company ahead of time will help guide your selection and onboarding processes. Some of the factors you will need to consider include:
– The supplier’s financial stability
– Their track record in terms of quality and compliance
– The potential for supply chain disruptions
– The supplier’s ability to meet your delivery requirements
– The security of your proprietary data
Once you have a good understanding of any risks a supplier may pose, you can put measures in place to help mitigate those risks. This might include requiring the supplier to undergo additional due diligence, or putting specific contracts in place that protect you in the event of a problem.
Once a new supplier has been identified, it’s important to ensure that they pose as little risk to your company as possible. The best way to do this is by leveraging supplier data when evaluating the risk of onboarding a new supplier. This data can include current and past financial performance, customer feedback, and past business dealings.
SupplierGATEWAY’s Supplier Onboarding Portal makes it easy for you to quickly collect crucial information about potential suppliers. You can quickly and easily ask potential suppliers for their documents and certifications upfront, allowing you to review and evaluate their risk profile before onboarding them into your supply chain. This means you can feel confident in the decision you’re making when bringing on a new supplier.
You can also customize your onboarding workflows depending on the type of supplier you’re onboarding. By creating custom workflows based on criteria like industry, you can save both your suppliers and your company time by asking questions that are relevant and gathering data that’s pertinent to that specific supplier’s industry. You wouldn’t ask a tool and die supplier about their agricultural certifications, after all.
Using SupplierGATEWAY’s Tools to Automate Onboarding and Risk Mitigation
You can use SupplierGATEWAY’s tools to automate your supplier onboarding and risk mitigation process. Our Supplier Onboarding Portal lets suppliers self-service their entire onboarding experience, making it easier and more efficient for them to complete the required documentation and provide the necessary data quickly. Our automated risk assessment tools quickly assess a supplier’s business integrity, financial soundness, and creditworthiness.
The SupplierGATEWAY platform also helps you stay on top of compliance monitoring, supplier credentials, and more by sending out automated alerts to your suppliers when their documentation is going to expire or when other acknowledgements need to be reviewed and signed. Keep all important documents in our intuitive Compliance Document Center, and stop wasting time digging through paperwork.
Mitigate Risk During Onboarding with an Onboarding Portal
One of the questions we get asked a lot is how to best leverage supplier data to mitigate risk when onboarding new suppliers.
The answer is simple: use data optimization and automation technology to quickly gather, organize, and validate supplier data. By doing so, you can ensure that high-risk suppliers are quickly identified and monitored should you choose to engage with them, or filtered out completely if they don’t meet your company’s qualifications.
At SupplierGATEWAY, we understand the importance of mitigating risk during onboarding. That’s why Our Supplier Onboarding Portal, part of our Enterprise Supplier Data Management Platform, allows suppliers to self-service their entire onboarding experience with minimal disruption. Companies that use our portal report that their onboarding processes, which used to take weeks, now often only take hours. Stop chasing down supplier paperwork and start saving time and money.
Conclusion
When it comes to mitigating risk during the onboarding process, having accurate and up-to-date information on your suppliers is essential. By leveraging supplier data management software like SupplierGATEWAY, you can streamline the process of data collection and verification, and minimize the risk of doing business with unqualified suppliers.
When you’re ready to reduce risk and streamline your onboarding while saving time and money, schedule your demo.
Learn How Your Company Can Benefit from Supplier Management
Businesses must stay on top of their supply chain to maximize their time and expenses and turn them into profits. For many businesses, an efficient and streamlined relationship with suppliers can make a significant difference when it comes to productivity, profitability, and organization. In this case, supplier management plays a crucial role in their operations.
But what is supplier management, and how does it benefit business operations? Here’s a comprehensive look into supplier management and how Supplier Gateway can help businesses grow fruitful business relationships with their suppliers.
What Is Supplier Management?
According to Gartner, supplier management, also known as vendor management, is a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle.
Running a business or service requires having the necessary supplies. Unless a business creates everything in-house, it will need to outsource raw materials, products, or services from businesses that provide a steady supply of these materials. Not all suppliers offer the same level of quality when it comes to their products and services, however.
So what happens if a supplier’s materials do not meet a business’ standards, or what if their suppliers’ operations and level of service doesn’t align with a business’s strategy? This is where supplier management comes in.
Supplier management allows buyers to strategically monitor supplier performance and relate that performance to the company’s success and future growth. Being able to strategically monitor suppliers . can help determine whether or not a supplier is a suitable fit for a long-term business relationship.
Types of Supplier Relationships
The relationship between businesses and their suppliers can vary depending on their needs. These include:
Buy the Market: A typical buyer-and-seller transaction that ends upon contractual fulfillment. No other communication outside of orders and fulfillment is necessary.
Ongoing Relationship: When a supplier is chosen among other similar suppliers. There is a formal or informal relationship where a business has a partnership with its supplier.
Strategic Alliance: A long-term relationship built on an exclusive arrangement where both the buyer and supplier work together. Both parties are incentivized to collaborate.
Backward Integration: A relationship where either the supplier is owned by the organization or is under the same organization as the business. Technically, both the supplier and organization are part of the same umbrella.
Benefits of Supplier Management
Through an efficient supplier management system, businesses can stay on top of their relationships with various suppliers, improve productivity, and minimize the risks that can affect operations because of their suppliers. Some of the benefits include:
Risk Reduction: Supplier management requires accurate supplier data. Having accurate and up-to-date supplier information reduces risks including financial, reputational, and compliance risk.
Cost Reduction: Provides long-term, cost-effective strategies. For example, Vendor A offers raw materials at a lower price, but their unreliable delivery leads to downtime and decreased productivity. Supplier management allows businesses to consider all operational costs.
Increased Efficiency: Supplier management helps to minimize delays in the supply chain and operational flow due to increased communication between suppliers and buyers. Having a supplier management system in place speeds up the onboarding process and makes operations smoother.
Consistent Pricing: Building long-term relationships with suppliers can lead to discounted pricing and better supply terms for buyers. This can reduce costs while maintaining the product quality and maximizing profit.
Supplier Lifecycle Management
A typical supplier management process includes supplier lifecycle management and typically includes the following:
Qualification: Identifying whether or not a certain supplier meets a buyer’s specific requirements. Only suppliers that fulfill specific requirements should be considered.
Evaluation: Once a supplier has qualified, they should be assessed based on product quality, supply risk, customer reviews, performance, and any other criteria that are important to your company.
Selection: Once the pool of eligible suppliers has been narrowed, a selection is made. The selection process often takes time due to its direct impact on the business. The ultimate goal in supplier selection is to select a supplier that shows maximum potential value and the want to form a long-term strategic relationship.
Onboarding: This step requires collecting necessary information and documents that the company needs in order to have a supplier approved in the system.
Supplier Performance: Supplier performance management helps buyers monitor suppliers and discover any issues before they become problems. Constantly monitoring supplier value and performance ensures that suppliers are adhering to any contractual obligations.
Identifying Risk: Monitoring suppliers includes Identifying risk. will prevent unexpected events such as a breach of contract, late deliveries, low quality, etc. Risk management is critical and yet the most overlooked.
Supplier Development: Businesses with strong collaborative relationships with their suppliers are more likely to grow faster than those who aren’t. Regularly sending feedback to supplies will help improve the process and manufacturing capabilities.
Supplier Management: Cultivating a mutually beneficial relationship with your suppliers will give you a significant ROI and gain more competitive advantage and innovation, which results in reducing cost, lower risk and higher quality.
Supplier Management and Risk
Companies may be exposed to supplier risks. This could be due to interruptions, issues with the supply chain, and any other undesirable behavior that could affect an organization’s own operations. Risk can be divided into four main categories – each of which can be mitigated through a number of ways, including having a solid supplier management system in place.
1. Strategic and Financial Risks
A supplier with poor financial health can result in issues such as economic dependency and bankruptcy. This, in turn, can lead to issues down the line for organizations as their vendors do not have the means to fulfill their obligations. Organizations may be able to mitigate this by checking their suppliers’ financial health before partnering with them.
2. Contractual and Legal Risks
The risk of non-compliance, legal challenges, fraud, and other legal issues that could arise from the partnership. The business could be affected by this through their reputation from associating with their vendor or result in operational delays or lawsuits in case of any legal conflict.
3. Operational Risks
This is linked to the raw materials, supplies, and other services provided by the supplier. Quality issues or incomplete orders can cause delays or reduce the quality organizations can provide their own customers. This can also lead to operational delays, which could halt production and affect productivity within the organization.
4. Reputational Risks
If the supplier is linked to scandals or disasters, it could affect the reputation of the organization. There’s also the issue of organizations that stand for certain ethical, social, or environmental issues only to partner with suppliers that don’t follow the same stance. Knowing the reputation of the supplier can mitigate issues like these.
What Challenges Do Supplier Management Solve?
Through the right supplier management procedures, businesses can overcome a number of challenges that are common when dealing with procurement and supply chain management:
Communication and Transparency: Suppliers should align with a business’ demands, requirements, and strategic goals. Otherwise, the organization’s demands may remain unfulfilled, which can affect the business’s ability to produce its own goods and services.
Unavailable Products or Services From a Supplier: Suppliers have more than one client , which means the risk of unavailability. This can cause delays and shortages that can affect the organization’s productivity and can hurt the working relationship.
Contract Conflicts: Issues such as missing or incorrect documents can affect both parties and lead to legal issues down the line. Through supplier management, both the vendor and the organization are aware of the terms of their relationship.
Supplier Risk Management: How Software Can Reduce Risk
Software platforms designed for supplier management can simplify a business’ processes. SupplierGATEWAY’s Enterprise Supplier Master Data Management Platform helps reduce risk and save time in the following areas:
Supplier Onboarding: Organizations can spend less time with the onboarding process while collecting the necessary supplier data and documentation. This means less time waiting for documents that can help businesses make decisions when choosing their suppliers and having the means to make well-informed decisions about partnering with suppliers.
Supplier Compliance Monitoring: Ensure suppliers and vendors are adhering to industry compliance practices that protect both parties. This can include insurance coverage, certifications, and other compliance data that’s necessary within their industry.
Financial and Legal Risk Monitoring: Businesses can reduce their liability, financial risk, and reputation by getting automatic alerts on any suppliers’ financial and legal status that could affect their own operations.
How Does SupplierGATEWAYMinimize Supplier Risk?
With all-in-one supplier data management software, businesses can keep their suppliers in check using a well-designed platform that houses all necessary supplier data. Software like SupplierGATEWAY’s Enterprise Supplier Data Management Platformis designed to source suppliers, track productivity and KPIs, and reduce the risk suppliers can have on your business without the added costs.
Faster Onboarding: Onboarding suppliers in hours rather than weeks.
Centralized Data: Have one database for all supplier data that suppliers can update themselves.
Accurate Reporting: Get accurate data and time-saving category reports that can help measure productivity and spending.
Convenient Sourcing: Businesses can easily find suppliers, manage bids, and handle all payments within one platform.
Efficient Supplier Information Management Software from Supplier Gateway
Maximize your productivity and procurement costs with the all-in-one platform for your supplier management needs. With Supplier Gateway, you can make your supplier data work for you while minimizing risk and improving your relationships with your suppliers.
Get in touch with us today to request a demo of our platform.
Take Control of Your Sourcing With These Three Agile Procurement Strategies
Introduction
Imagine this: Your biggest supplier falls behind on their deliveries, and you’re suddenly faced with a shortage. You scramble to find a new supplier, but you can’t find a suitable replacement in time to meet your deadline. What do you do?
This is just one example of how agile procurement can help your business take control of its supply chain. Agile procurement is a strategic approach to purchasing that allows businesses to be more responsive to changes in the market.
Post-pandemic and in the midst of a looming recession, supply chains remain delicate and easily-disrupted, which can mean lost profitability. According to Ardent Research, the number of CPOs prioritizing cost-savings has almost doubled from 2021 to 2022.
Let’s take a deeper look at agile procurement and how implementing it can significantly increase cost and time-savings for your company.
What Is Agile Procurement?
Agile procurement is a sourcing and procurement strategy that enables businesses to be more responsive to the ever-changing market. It’s a way for companies to be more flexible in order to meet the needs of their customers.
Put simply, agile procurement is all about being able to move quickly and make decisions on the fly. It’s about being able to adapt as new information comes in and reacting quickly to changes in the market. This can be done by implementing certain tools and processes, such as contract management software, supplier management software and RFQs/ RFIs.
Agile procurement is often discussed in opposition to traditional procurement. Traditional procurement tends to be a much slower process, where lots of time is taken in each procurement stage. Decisions aren’t hurried, and oftentimes have to go through the hands of numerous people in numerous departments before being approved.
Agile procurement oftentimes takes multiple procurement steps and deals with them simultaneously. For instance, supplier onboarding and RFP responses often happen concurrently. Contract negotiations may also happen during the supplier sourcing process.
Setting the Right Objectives and Goals for Agile Procurement
When implementing agile procurement into your procurement processes, setting the right objectives and goals is imperative. What is your company looking to achieve with this new way of working?
Agile procurement is not about cutting corners or taking short-cuts. It’s about being able to move quickly and effectively in order to get the best results for your business. Your goals should directly reflect areas in your procurement process that need improvement.
Questions you may want to consider:
What are our biggest challenges when it comes to procurement?
What are our biggest pain points in the supply chain?
What areas of procurement would benefit from being more agile?
What can we do to improve communication between buyers and suppliers?
How can we speed up the process of getting new products to market?
Three Different Agile Procurement Strategies
There are several different theories behind agile procurement strategies that can be used in your business. These three are the most commonly used approaches:
Planning for the Unknown. This type of strategy is used when you don’t know what you’re going to need or when you’re not sure what the supplier landscape looks like. In this case, you’ll want to have a well-defined plan that outlines what product/service you’re looking for and how you’ll go about finding it. You’ll also want to be prepared to make quick decisions when you find the right supplier.
Fast and Furious/Just-in-Time. This option is great when you need to get something quickly, but it’s not a long-term solution. This type of strategy relies on suppliers who are able to meet your deadlines and who have a proven track record of success. You’ll also need robust systems in place so you can make quick decisions and get the products or services you need delivered on time.
Slow and Steady. The preferred option for long-term sourcing and supplier relationships. With this approach, you’ll want to take your time to build a relationship with each supplier and develop a clear understanding of their capabilities. This will help ensure that you select the right supplier for your business and that you’re able to get the best value for your money.
Other agile procurement methods that are often part of the above strategies are multi-sourcing and strategic sourcing. Learn more about multi-sourcing as well as strategic sourcing.
Implementing an Agile Procurement Approach in Your Organization
It can be hard to know where to start with implementing an agile procurement approach in your organization, but there are lots of tools out there to help. The most important part is to set up the right system that connects all your stakeholders and makes it easy for them to collaborate.
Start by creating a strategic framework that outlines the key steps in your procurement process. This will give you a clear roadmap for taking action, as well as helping you identify potential risks and opportunities.
Next, look into tools and software that integrate supplier management, onboarding and procurement. The Enterprise Supplier Data Management Suite from SupplierGATEWAY powers an agile procurement system by integrating supplier data management and supplier relationship management into one collaborative environment. It helps automate processes like supplier onboarding, purchasing and analytics. Plus, it’s simple for all stakeholders to use, so it makes it easier for everyone to collaborate smoothly on large-scale projects.
Common Challenges Faced With Implementing an Agile Procurement Strategy
While there are many benefits to agile procurement strategies, there are some common challenges you should be aware of.
The implementation of an agile procurement strategy can be a daunting task. This is because it involves changing the way your procurement team works and how they interact with suppliers. You may also need to make adjustments to your systems and processes, which can be time consuming.
You’ll also need to consider the cost associated with implementing an agile procurement strategy. New tools, systems and processes may require upfront investments in order for them to be effective.
One of the most challenging aspects of implementing agility into your procurement strategy is ensuring that suppliers are on board. To ensure a successful implementation, it’s important that both buyers and suppliers understand what is expected from them during the process and are committed to making a transition to agile procurement work.
Conclusion
When it comes to agility in procurement, remember that it’s not a one-size-fits-all solution. You’ll need to tailor it to fit the specific needs of your business. By taking the time to implement agile procurement strategies, you’ll be able to take control of your business, reduce your costs and procurement-related risks, and get the most out of your supplier relationships.
If you’re looking for more procurement agility in your business, SupplierGATEWAY can help. We offer a range of dynamic solutions that make managing supplier data and relationships easy and affordable. Contact us today to request your demo.
A Comprehensive Guide to Sustainability Assessments for Your Business
Introduction
Sustainability measures are the topic du jour regarding supply chain risk reduction and cost-savings. However, the working parts of what exactly constitutes ‘sustainability measures’ can be quite specific and overwhelming. From understanding how to calculate GHG emissions to ensuring proper labor policies, sustainability covers aspects of your business ranging from environmental impact to human rights.
Sustainability is normally discussed in terms of greenhouse gas mitigation; however, DEI programs, overall ESG commitments, and labor practices also contribute to a company’s sustainability. With so many working parts involved, it can become overwhelming to measure, track, and report on all of these areas.
That’s why we’ve partnered with SupplyShift to take the guesswork out of sustainability reporting. With our Sustainability Assessments, we ask the right questions and uncover just how truly sustainable and responsible your supply chain truly is.
Which Types of Sustainability Assessments Are Important for Your Company?
There are a variety of sustainability assessments that your company can undertake in order to measure its environmental and social performance. The most important ones will vary depending on your company’s industry, operations, and goals.
A few key types of sustainability assessments include:
Environmental Impact Assessments (EIAs): An EIA is a key tool for measuring a company’s greenhouse gas emissions and environmental impact.
Corporate Social Responsibility Reporting (CSR): CSR reports detail a company’s social performance, including its labor practices, community engagement, and environmental initiatives.
Supply Chain Sustainability Assessments: A supply chain sustainability assessment looks at how a company’s suppliers measure up to its environmental and social standards
Our Sustainability Assessments are specifically supply chain-oriented, and give you a clearer picture into just how sustainable your suppliers and supply chain actually are.
What Are Sustainability Assessments?
Our Sustainability Assessments are questionnaires that fall into four separate areas of sustainability. We ask the right questions and collect important supplier information in the following areas:
Supplier ESG
Greenhouse Gas (GHG) Leadership and Reporting
Supplier DEI
Human Rights Compliance
Once your suppliers have filled out our questionnaires, we analyze the data and return a Sustainability Score to you. These scores also come along with an easy-to-understand color code that indicates your company’s level of risk associated with a particular supplier in regards to whichever Sustainability Assessment you’ve chosen:
Red indicates high risk
Yellow indicates medium risk
Green indicates low risk
Types of Sustainability Assessments
We currently offer four types of Assessments— Supplier ESG, Greenhouse Gas Leadership and Reporting, Supplier DEI, and Human Rights Compliance. Let’s discuss each more in-depth.
Supplier ESG
Our Supplier ESG Assessment is a basic assessment of a company’s environmental, social, and governance policies and practices to help your organization better understand risk and help improve the social and environmental conditions that exist within your supply chain. The Supplier ESG Assessment covers all relevant risk and sustainability topics.
GHG Leadership and Reporting
The GHG Leadership and Reporting Assessment helps your organization understand which suppliers are actively reducing GHG emissions and climate risk. This assessment looks at a supplier’s overall carbon emissions, how accurately a supplier measures, tracks, and reports their carbon footprint, what the supplier is doing to reduce GHG emissions, and whether the supplier has programs that can support ongoing GHG mitigation programs and emissions management.
Supplier DEI
Champion a diverse, equitable, and inclusive (DEI) supply chain by better understanding your supplier’s DEI initiatives. Armed with insights into existing DEI commitment statements or policies, which suppliers have a diverse supplier status, and a supplier DEI program that promotes diversity in their supply chain, your organization can then decide how to strategically engage with suppliers regarding DEI.
Human Rights Compliance
Tailored to the reporting requirements of human rights legislation in Germany and other countries with similar legislation, the Human Rights Compliance Assessment improves your visibility into your suppliers’ labor practices. This tool allows you to meaningfully address human rights, modern slavery and human trafficking concerns while also enabling compliance with global laws.
Why Are Sustainability Assessments Important?
Sustainability Assessments are important for your business because they can help identify opportunities to improve specific areas of your supply chain. These assessments can also get your company into compliance with different types of laws, and reduce your overall financial and liability risk for non-compliance.
When you understand your suppliers’ strengths and weaknesses in these areas, you can make better decisions regarding how to engage them. For example, if you find that a supplier does not have a scientifically sound GHG reduction plan you can discuss getting one in place and create contractual obligations for engagement based on specific metrics of improvement.
Assessing the sustainability of your supply chain also has positive impacts on your company’s overall reputation. As consumers become more environmentally and socially conscious, they are increasingly looking for businesses that share their values. By demonstrating your commitment to sustainability with a public statement that outlines the measures your company is taking to ensure a sustainable supply chain, you can set yourself apart from the competition and attract more customers.
What Is the Outcome of Sustainability Assessments?
The end goal of sustainability assessments is to give you an at-a-glance picture of how sustainable your supply chain is. With a Sustainability Index Score for your suppliers, you’ll have the ability to quickly measure an individual suppliers’ sustainability as well as the sustainability of your supply chain.
Sustainability assessments can provide a variety of outcomes depending on what data you’re collecting. For example, if you’re looking for information about a specific supplier, you may receive reports about labor practices and environmental standards. If you’re looking for data about your entire supply chain, you may receive information on emissions and waste management practices.
Regardless of what Assessments you choose, Sustainability Assessments provide insights that can inform decisions about how to better improve operations, engage suppliers and meet internal ESG goals. You’ll be able to make sure that your supply chain is performing up to its full potential—and that’s something to be proud of!
What Is SupplierGATEWAY and How Can It Help With Sustainability Assessments?
SupplierGATEWAY is a supplier engagement and supplier data management platform that makes it easier for buyers and suppliers to do business. Your company can use the Sustainability Assessments to understand supplier performance and compliance with sustainability goals, which helps reduce risk in your supply chain.
Not only can SupplierGATEWAY help automate your assessments, but it also allows you to track progress over time so you can measure the effectiveness of your efforts towards sustainability. You’ll get an at-a-glance Sustainability Index Score for each supplier, which gives you a clear overview of their performance on key metrics related to the assessments you choose.
Conclusion
Sustainability Assessments can help you identify ways to reduce greenhouse gas emissions in your supply chain, improve supply chain ESG, DEI, and more. When you partner with SupplierGATEWAY, you get access to our team of experts who can help you create a sustainability plan that meets your unique needs.
Increase Agility and Reduce Risk with Accurate Supplier Data Management
Introduction
Imagine you are the head of procurement for a midsize company. You are tasked with reducing the company’s risk and creating faster, more agile systems. One way to achieve both of these goals is by improving the accuracy of your supplier data.
Accurate supplier data is the elephant in the room no one really wants to talk about, but if you’re going to reduce risk and become more agile in your procurement, you have to deal with it. By leveraging the power of a supplier data management platform like SupplierGateway’s Enterprise Supplier Data Management Platform, you can quickly improve supplier data accuracy while reducing risk and creating a more agile, resilient supply chain.
In this article, you’ll learn accurate supplier data can help you manage risk and enhance agility.
The Importance of Accurate Supplier Data
The quality of your supplier data is critical to the success of your procurement organization. Data quality affects your ability to make risk-aware decisions, identify new suppliers, and track supplier performance. With accurate supplier data, identifying and mitigating risk becomes second nature, and slowdowns in procurement workflows are reduced significantly.
But what is accurate supplier data? It’s up-to-date, complete, and consistent. The more accurate your data is, the more reliable your decisions will be. Your procurement team must have access to the most current supplier data in order to make fast, accurate, and reliable decisions.
Supplier data is the key to reducing risk in your procurement process. Accurate data can help you identify and assess risk factors early on and make better decisions about which suppliers to work with.
Risk can come from a number of sources, such as financial instability, supplier capability issues, or compliance and regulatory risks. By monitoring supplier data closely, you can reduce the chances of any negative impact on your business, including reputational and legal risk.
Data-driven risk assessment is one of the most effective ways to manage risk in procurement. With accurate supplier data at your fingertips, you can make informed decisions that protect your company and ensure its continued success.
How Can Accurate Supplier Data Enable Agile Procurement?
SupplierGateway’s Supplier Risk Management tools help your company reduce risk and enhance agility before placing your first PO.
Accurate data starts with accurate data collection during the supplier onboarding process. With a self-service onboarding portal that potential and current suppliers can access anytime, your company can obtain supplier data from the source instead of chasing down disparate information. Having accurate, up-to-date information before you even engage a supplier speeds up requisitions and approvals. According to Informatica, companies that automate onboarding and other risk management processes experience time savings of up to 80%. This translates into faster time to market.
When you have accurate supplier data, you’re able to make decisions in real time. You can quickly identify and mitigate risks and change your supply chain as needed. This flexibility enables you to respond quickly to changing market conditions and stay ahead of the competition.
With SupplierGateway, you have a centralized source of truth for all your supplier data. This allows you to quickly and easily access the information you need when you need it. Our intuitive user interface makes finding and using the information you need to make informed decisions easy.
What Challenges Should Procurement Professionals Consider When Managing Suppliers?
Truthfully, managing your suppliers is one of your biggest challenges as a procurement professional. Your company may have hundreds or even thousands of suppliers, and managing all of them accurately may not be feasible. Identifying your most important suppliers is one way to streamline this process.
As a procurement professional, you should consider the potential risks associated with your suppliers, such as bankruptcy findings, liens, or other legal, financial, and compliance risks. Data accuracy errors can occur when supplier data is outdated, inaccurate, or not verified by a third party, leading to wasted time and exposure to undue risk for your company.
Furthermore, inaccurate data can result in incorrect orders being sent to suppliers. All of this can lead to increased costs, missed deadlines, and negative impacts to your bottom line.
Using the right tool is key to avoiding these issues. A great supplier data management platform—like SupplierGateway—can help procurement professionals reduce risk and alleviate manual data-gathering processes by automating the process. The Enterprise Supplier Data Management Platform streamlines your supplier data collection process, eliminates data silos, reduces risk, and saves you time. With this platform in place, you can confidently manage your supplier relationships and ensure accurate data is always readily available.
5 Steps Procurement Professionals Can Take to Ensure Accurate Supplier Data
Having accurate supplier data is essential for efficient and productive procurement operations, but how can you ensure that your supplier data is always up-to-date and reliable?
Here are 5 steps you can take to ensure accurate supplier data:
Centralize your supplier data and use a unified supplier data management platform. Use one database as one source of truth for supplier information, and allow access to this database to those who require it. Stop updating multiple databases and eliminate inconsistencies in your supplier data.
Enable a self-service supplier onboarding portal. Allowing suppliers to input their own data saves you time and increases data accuracy by getting important information directly from the source. Create custom onboarding workflows based on supplier type to save your suppliers time.
Ensure your current supplier data is up-to-date and accurate. You can invite current suppliers to register in your onboarding portal and update their own supplier profiles as needed.
Identify your critical suppliers and automate compliance and risk monitoring. Identifying critical suppliers and monitoring them saves your team time and money, particularly when your supplier base contains hundreds or thousands of suppliers.
Automate compliance alerts for your suppliers. Ensure your suppliers always know when compliance documents, contracts, and other important certifications are due for renewal.
Another useful step is to invest in a Supplier Data Management Platform like SupplierGateway’s Enterprise Supplier Data Management Platform. This platform allows you to streamline your supplier data collection process, eliminate silos of supplier data, reduce risk, and save time. And the best part? It’s built with cloud-friendly technologies to access your supplier data anytime, anywhere quickly.
Tips for Using SupplierGateway to Manage Accuracy in Supplier Data
Using SupplierGateway to manage your supplier data is an effective way to reduce risk and enhance agility. Here are a few tips on how to maximize the benefits of the platform:
—Collect data from your suppliers in an organized, centralized, and secure manner with our Supplier Onboarding Portal. This will ensure you have correct, up-to-date information on your suppliers up-front.
—Put processes in place for regularly auditing and validating supplier data to ensure accuracy and identify discrepancies.
—Keep important compliance documents organized and accessible in the Compliance Document Center. Review your supplier agreements periodically to ensure compliance with legal requirements, regulations, and safety standards.
—Reduce your company’s liability and get alerts on critical suppliers for risks like bankruptcy, tax liens, and late payments that could negatively impact your business.
Conclusion
Managing supplier data is essential to reducing risk and remaining agile in today’s marketplace. Accurate data allows businesses to make informed decisions quickly and react swiftly to supplier issues. Additionally, a well-managed supplier database can help businesses save time and money and more accurately identify risk.
Take Control of Your Data
Transform Your Supplier Information Management
Supplier information should be an asset to your organization, not a risk. Find out how to start or transform your supplier information management program with help from one of our sales experts.
Navigating the German Supply Chain Due Diligence Act for Supply Chain Transparency
Introduction
SupplierGATEWAY is dedicated to helping buyers and suppliers operate with maximum sustainability. The German Supply Chain Due Diligence Act (SCDDA) which became law in June of 2021, enters into force on 1/1/2023. This law intends to protect and strengthen human rights and the environment via the supply chains of companies that operate within Germany.
In this article, we’ll take a closer look at the German Supply Chain Due Diligence Act and discuss the steps your company needs to take to comply with the law. We’ll also provide some tips for how to reduce risk in your supply chain and increase sustainability.
Overview of the German Supply Chain Due Diligence Act
The German Supply Chain Due Diligence Act (SCDDA) became law in June of 2021 with the aim of mitigating risks of forced labor and human trafficking within the German supply chain. While SCDDA focuses primarily on the “social” aspects of ESG, the act does recognize that changing environmental factors heavily impact the quality of overall human health.
The Act applies to companies with more than 3,000 employees in 2023, expanding to companies with more than 1,000 employees in 2024.
The SCDDA requires companies to implement risk management processes and controls to identify and mitigate risks of forced labor and human trafficking in their supply chains. Firms must also disclose their policies and practices relating to due diligence on forced labor and human trafficking to the Federal Ministry for Economic Affairs and Energy (BMWi).
This new legislation places significant obligations on companies doing business in Germany, but the benefits are clear. Compliance with the SCDDA will help businesses ensure that their supply chains are free from slavery and human trafficking, protect their reputation, and maintain their competitive edge.
What Type of Businesses Does the Act Cover?
The Act applies to all companies that have a presence in Germany, regardless of the location of their headquarters, that employ 3,000 or more people. In 2024, the employment requirement will drop to 1,000 or more.
Businesses that have a local office in Germany, or that process, store or ship goods in Germany will be affected by the Act. If you’re unsure whether or not one of your suppliers is covered by the Act, contact your local German consulate for clarification.
What Human Rights Risks Does The Act Apply To?
The SCDDA defines a risk related to human rights as “a situation in which there is a sufficient degree of probability based on factual indications that a violation of one of the following prohibitions will occur”:
All forms of slavery or similar practices of domination or oppression at work
Disregarding the local applicable rules on workplace safety and working conditions if this could lead to workplace accidents or work-related health risks
Disregarding freedom of association
Employment discrimination
Wage discrimination
Causing harmful changes to the soil, polluting water, polluting air, causing harmful noise emission
Acquiring, developing, or otherwise using land, forest, or water from unlawfully evicting persons from or depriving them of the use of such land, forest, or water
Commissioning or using private or public security forces to protect a business project if, the security forces will infringe the prohibition on torture, harm life or limb, or interfere with freedom of association and the right to collective bargaining
Actions or inactions that are directly capable of infringing a protected legal interest
What Environmental Risks Does The Act Apply To?
The SCDDA defines a risk related to the environment as “a situation in which there is a sufficient degree of probability based on factual indications that a violation of one of the following prohibitions will occur”:
Production and use of chemicals according to article 3
Non-environmentally sound handling, collection, storage, and disposal of chemical waste contrary to the requirements of article 6 of the POPs Convention
Export of hazardous wastes and other wastes according to article 1
Export of hazardous wastes from states listed in annex VII of the Basel Convention to states not listed therein
Import of hazardous wastes and other wastes from nonstate parties of the Convention
The Consequences of Non-Compliance
Complying with SCDDA statutes is of the utmost importance for organizations doing business in Germany. Compliance not only protects your company’s reputation, but also its bottom-line as penalties for non-compliance are steep.
Fines: Monetary penalties of up to 8 million euros can be assessed depending on the nature and gravity of the violation. Companies with an average annual turnover of over 400 million euros can be fined up to 2% of their average annual turnover.
Ban from public tenders: Perhaps an equally, if not more important consequence is that violating companies can be excluded from winning public contracts in Germany for up to three years.
Trade unions and NGOs can also be granted the authority to conduct litigation for an affected party.
Requirements for Responsible Sourcing in the Supply Chain
SCDDA requires companies to take a risk-based approach to responsible sourcing, and to enact adequate policies and procedures to mitigate the risks of slavery and human trafficking in their supply chains. Companies must also ensure that their suppliers comply with these policies and procedures.
Compliance with the SCDDA will require the following:
Establishing a risk management system
Defining where responsibility for compliance lies within the company
Issuing a policy statement
Performing regular risk analyses
Establishing preventive measures within the company’s own field of business and in relation to any direct suppliers
Taking remedial measures
Establishing a complaints procedure
Implementing due diligence obligations with respect to risks at indirect suppliers
Documentation and reporting
If you’re operating in or supplying goods to Germany, it’s important to understand the requirements of the Act and make sure your business is compliant. SupplierGATEWAY has partnered with SupplyShift to bring you Sustainability Assessments that include a human rights assessment that is specifically informed by the SCDDA as well as other modern slavery laws enacted in California, France, UK, and Australia.
Benefits of Supply Chain Compliance
By adhering to the German Supply Chain Due Diligence Act, your company’s entire supply chain will be mitigating human trafficking and modern slavery. Ensuring your company’s due diligence also means your company has all proper documentation and protocol in place should any of your suppliers be in violation of the law. Your company will also avoid reputational damage while staying competitive in the marketplace.
In addition, compliance with the Act will provide your business with access to an array of sustainability-focused benefits. You’ll be able to access data on suppliers who are actively engaged in sustainable initiatives, which allows your company to source more sustainably.
If you’re looking to ensure maximum sustainability through your supply chain, here are 4 tips that will help you navigate the German SCDDA.
Implement a SCDDA-compliant risk management process. This needs to be tailored to your specific industry and suppliers, and include a thorough assessment of the risks posed by your suppliers and how to mitigate them. Assessing and monitoring your suppliers’ sustainability initiatives allows your company to identify and mitigate potential risk before damage occurs.
Work with your suppliers to get them compliant. Ensure that all compliance definitions are used consistently throughout any transaction and note that this may affect delivery times or manufacturing costs.
Use SCDDA-compatible processes for contract management. This ensures that evidence of compliance can be quickly stored and accessed during any auditing processes.
Familiarize yourself with best regulatory practices on an ongoing basis. In order to be compliant, you have to know the law. Make sure your company’s legal department is always on top of any changes in regulation pertaining to supply chain due diligence.
Tools to Streamline Supply Chain Compliance
When it comes to compliance, the key is to know where to start. Having reliable, accurate data on your suppliers is the first step not only towards SCDDA compliance, but to creating a more efficient and transparent supply chain for your company.
Having a supplier’s sustainability score allows you to set specific goals for each supplier and track their progress over time. This helps eliminate uncertainty regarding SCDDA compliance and ensures that each negotiation yields the best possible outcome for all involved parties.
Suppliers, Not Strangers: Turn Your Suppliers into Collaborators with Supplier Relationship Management.
It’s not easy being in charge of finding and securing the best possible suppliers for your business. It’s even harder to maintain healthy, productive supplier relationships. But it’s a critical component of success, and one that can be mastered with a little know-how.
In this short guide to supplier relationship management, we’ll teach you the basics on how to get started. You’ll learn how to organize your current supplier data, capture accurate data going forward, monitor and optimize your supplier relationships, and maintain positive relationships with your suppliers long-term.
What Is Supplier Relationship Management?
Supplier Relationship Management, or SRM, is a process that helps buyers maintain good relationships with their suppliers. SRM affects the entire supplier lifecycle—from finding new suppliers and maintaining good communication with them to ensuring that suppliers meet their contractual obligations. It also ensures that you as a buyer hold up your end of the contract as well.
SRM implementation can be overwhelming, but it’s worth the effort. Your suppliers are an essential part of your business. Keeping track of your suppliers, identifying areas of supplier improvement, and ensuring that your suppliers are always meeting your expectations are all benefits to starting a supplier relationship management program.
The Benefits of Supplier Relationship Management
Implementing a supplier relationship management program improves communication, shortens order lead times, reduces stockouts, and improves overall supplier performance. What this means for your business is time and cost savings, reduced time to market, and positive impact on your overall bottom line.
SRM benefits suppliers as well. For suppliers, SRM can mean better communication, improved performance metrics, faster payment, and increased chances of winning future contracts.
Implementing SRM can be a challenge, but the benefits are clear. With the right tools and procedures in place, your company can achieve better relationships with suppliers, see improved performance across the board, save time, and reduce cost.
Supplier Data Management & Optimization
Let’s face it. Chances are, your supplier data is a disorganized mess that no one wants to deal with. However, your supplier data is the keystone to running a successful supplier relationship management program. When it comes to supplier master data management, your goal should be to cleanse, organize and optimize your supplier data. This will help you make better decisions about who to do business with, and who to partner with.
There are a few ways to go about this:
Review your suppliers and remove any that are no longer relevant
Clean up your supplier data by consolidating duplicates and removing incorrect information
Organize your data by supplier category, geography or product category
Use optimization tools to identify the best suppliers for your business
By taking the time to clean up and optimize your supplier data, you’ll be able to make more informed decisions about which suppliers to work with, and ultimately improve the efficiency and effectiveness of your entire supply chain.
Supplier Onboarding & Supplier Monitoring
Your supplier onboarding and monitoring processes should cover all aspects of the supplier lifecycle—from initial selection and negotiation to ongoing communication and review.
It’s important to have a structured supplier onboarding process that efficiently collects the right supplier data. This first step in supplier management is crucial to the overall supplier relationship management process. If your onboarding includes the following, you’ll have fewer headaches to deal with in the future:
Centralized data collection. All supplier data should be housed in a centralized database. This prevents the need to update multiple entries in different databases for the same suppliers and reduces data siloing.
Self-service. Suppliers should be able to onboard themselves at their convenience via an online portal. This means all supplier data is collected up front, from one single source of truth—the supplier themselves.
Supplier profile self-management. Suppliers should be able to access and manage their own profile within your supplier management system. That way, suppliers can make information updates as needed to keep their profiles current and accurate.
Automated alerts. Automated alerts send notifications to suppliers whenever a document in their profile needs to be updated or is about to expire. This saves you from having to chase down paperwork from hundreds or thousands of suppliers.
You’ll also want to develop a framework that outlines how suppliers will be monitored and evaluated on an ongoing basis. This can include performance reviews, audits, or other methods for measuring quality. Any framework for review or evaluation needs to be stated contractually, so that both you and your supplier are on the same page.
These review requirements should also include performance indicators for your company as well. For instance, on-time payments over a period of time could grant your company better payment options, such as net 60 instead of net 30.
The goal here is to ensure that the supplier is providing you with quality products or services, and is meeting any contractual requirements. This type of relationship management can help ensure consistency over time and lead to better customer satisfaction.
Supplier Relationship Management Software
Looking for a way to streamline your supplier relationships? Supplier relationship management (SRM) software can help. It helps you keep track of suppliers, manage contracts, and make sure you are getting the best value for your money.
SRM software can help you simplify processes like source-to-pay, procurement, supplier onboarding, and supplier risk management. It can also provide data that can be used to analyze supplier performance over time. This level of automation makes it much easier to monitor supply chains and measure performance metrics—like delivery times and quality of goods—that are critical to your bottom line.
In addition to providing visibility into the supplier network and enabling better decision-making, SRM software also helps with communications—allowing users to quickly message specific suppliers or groups with important updates or notices. Finally, the software allows for automated tracking and reporting on KPIs related to supplier performance.
Best Practices for Successful Supplier Relationship Management
Having a successful supplier relationship management strategy can help ensure that your business operates efficiently and cost-effectively. Here are some of the best practices to ensure that you’re on the right track:
Establish clear, documented expectations. Make sure that expectations are understood by both parties. Establishing these expectations up front will help to avoid any potential misunderstandings down the road.
Develop an open line of communication. Developing a strong line of communication between yourself and your supplier can help ensure that all needs are being accounted for. Encourage healthy conversations and ensure that supplier feedback is taken into consideration in order to foster an effective working relationship.
Foster relationships based on trust. Building trust between you and your suppliers is essential for successful relationships. Provide clear communication about what you expect from the supplier and make sure that deadlines are met accordingly by all parties. This will help build mutual trust, which is essential for successful partnerships.
Conclusion
Supplier relationship management is vital to the success of your business. By having a central place to manage your supplier relationships, you can streamline your processes, improve communication, and make sure that you’re getting the best possible service from your suppliers.
With the right supplier relationship management software in place, you can automate many of the tasks associated with supplier management, making it easier to keep track of your supplier relationships and ensuring that you’re getting the most out of your partnerships.
Ready to talk with our experts about our supplier management solutions? Request a demo and start taking control of your supply chain.
Your Supplier Data is a Wreck. Here Are 5 Ways to Fix It.
Supplier data management is a task that often seems too big to tackle. When you work with hundreds or even thousands of different suppliers, keeping tabs on all of them can range from tedious to impossible.
Managing your supplier data serves many critical functions, and improper supplier data management can cost your organization more than just time and money. Bad supplier data management can expose your company to legal, reputational, regulatory, and security risks.
In other words, bad supplier data can wreck your company.
At SupplierGATEWAY, we’ve heard the same story, time and time again.
“We use Excel and emails to cobble together supplier information.”
“I don’t know all of my supplier tax ID numbers.”
“It takes so long to get correct supplier information. Sometimes it takes us weeks to chase down the proper paperwork.”
“We use supplier questionnaires to collect information and then have to manually enter responses. It’s just not efficient.”
Good supplier data is at the heart of any successful supplier management program. Understanding why your data is bad and learning how to fix it is a great way to increase productivity while saving time and money.
What Makes Good Data?
Ultimately, good data is useful and accessible. Data quality is generally measured by how useful the data is to the data’s user. However, this “data fitness” is lacking in nuance when dealing with supplier data. For example, your company could have large amounts of data on a certain supplier in accounts payable, but the procurement department has no quick way to access that data. Data that is useful for one department is useless to another.
Assessing Your Current Supplier Data
There are five key areas you’ll need to focus on when assessing your supplier data and how you can improve each:
Accuracy
Completeness
Consistency
Accessibility
Usefulness
Data Accuracy
It is critical that the data collected correctly describes what it represents. This ranges from misspelling supplier names to inputting incorrect tax ID information. When your sources for supplier data are random emails and old spreadsheets, you’re bound to have inconsistent information.
Incomplete data can and does affect decision-making. When you don’t have the same information attribute captured for all suppliers, how can you compare them? Incomplete cost averages can cause your department to lose money; incomplete capability data can mean you’re not making the most out of a great supplier you already work with.
Incomplete data impacts tracking your diverse supplier spend, too. Less than 1% of all diverse suppliers have a diversity certification, so finding out diversity information on your own can be next to impossible. Data enrichment fills in these gaps—running your data through 300+ commercial and governmental databases can fill in important information and instantly increase your diverse supplier spend without having to source a single new supplier.
Data Consistency
Having consistent data across all specific entries for your suppliers sounds a little confusing, but it truly isn’t. Having consistent data means that when an entry is labeled “phone number”, that’s what’s actually listed in that data field, and that data field for a supplier’s phone number is labeled as “phone number” for every supplier.
Data consistency is always achieved by having a single source of supplier data. Data conformity can be addressed by setting specific attributes for specific data entries, and returning an error when those attributes aren’t met. Meaning that if someone enters a phone number where an email address should be, when the information is submitted, an error would be returned for the incorrect entry.
Accessibility
So, you’ve got accurate supplier data, but you can’t access it to create the report that your boss wanted on her desk three days ago. What good does all that complete data do when it can’t be accessed at all, let alone quickly?
Accessibility issues range from esoteric filing systems that no one understands to data being completely segmented with access granted to only a few key individuals. What happens when the person who created those filing systems retires, or the people who have access to specific data are out sick? When processes rely on a specific person to be completed, the process is inherently broken.
Using one centralized system for data storage and access eliminates data silos and reliance on individuals. Unfortunately, lots of supplier and data management software platforms come with very few seat licenses and charge heavily for additional seats. This means that access for an entire team, let alone company, is often financially unfeasible. Ensuring everyone who needs access to data can easily obtain it should be a priority when choosing supplier data management software.
Usefulness
Having useful and relevant data about your suppliers reduces time spent scrolling through non-applicable data fields. Relevance may also differ from department to department, so differentiating your data requirements based on supplier type can be helpful.
Asking a tool and die company for information regarding fabric fire safety is irrelevant data collection that not only wastes your time when looking for information, but wastes your suppliers’ time when they’re onboarding. Understanding what data is important to what department and grouping relevant data saves search time. Creating different onboarding workflows for your suppliers based on industry, for example, helps guarantee the questions you ask to suppliers are relevant to them and that the data you collect is useful and relevant to you.
Get Your Data In Order
When you understand what good data collection and availability looks like, you can easily see the gaps in your current supplier data management systems. Addressing your supplier data management pain points through the lenses of accuracy, completeness, consistency, accessibility, and usefulness can help you find solutions and move forward quickly and efficiently.
We know the task is huge and overwhelming, but it doesn’t have to be. SupplierGATEWAY’s supplier management platform helps you capture and manage your supplier data in ways that produce real, measurable results.
When you’re ready to get your data in order, request a demo and make your data work for you.
Time Machine
The Time Machine allows you to see the supplier’s diverse status on the day you spent money with them, even if their status changes later. Your prior diverse supplier spend won’t change just because a supplier is no longer diverse owned or certified.
About the Time Machine
The Annual Report publishing tool (the “Time Machine”) enables authorized users to “freeze” data for a specified period. You can choose between whole fiscal or calendar years, and data can be frozen on a quarter by quarter basis.
The Time Machine allows you to confirm that all eligible diversity spend is properly captured, including spend found during data discovery. This will maximize the capture and impact of your diversity spending overall, and allows you to capture spends with businesses who may have been certified or diversely owned in the past, but are no longer.
Who can publish (freeze) Time Machine reports?
The ability to publish (or freeze) a report is restricted to users with the appropriate permission designated by your system administrator.
Users that can publish Time Machine reports will see the Time Machine Manager icon in the Spend Reporting dashboard.
Users without this permission will only see the Time Machine Switch to view or not view Time Machine data.
Who can see published (Time Machine) vs live data?
All users with access to the Tier-1 spend dashboard have the ability to view Time Machine vs live data. Switching between the two views is as simple as toggling using the slide button next to the Tier-1 tools.
It is important to understand the distinction between the two views.
Time Machine Data vs Live Data
Time Machine Data
Time Machine data is a representation of spend for a past period of time based on the demographics of the suppliers at the time you spent money with them.
For example, if you spent $100 with ABC Corp on March 24, 2021 and ABC Corp was a Woman Owned Business (WBE) with an active WBE certification, the spend would record as follows:
WBE – $100
WBE Certified – $100
What happens if ABC Corps Status Changes after March 24, 2021?
Imagine that ABC Corp was sold to a large publicly traded company on April 1, 2021 and is now no longer woman owned or a Certified WBE. When you are in Time Machine mode, the $100 in spend for ABC Corp on March 24, 2021 will still show as WBE and Certified because you spent $100 with ABC Corp when they were WBE and Certified.
That is the key benefit of the Time Machine – it shows your spend based on how the supplier was categorized on the day you spent the money with them, not how they are currently categorized.
If you are familiar with how annual reports or financial reports are generated, this should be familiar. The data you are freezing is an accurate representation of what you did during a specific time period in the past and that information stays static and does not change.
Live Data
Live data is a representation of spend based on what demographics apply to your suppliers right now. This is usually quite accurate, but as the fiscal or calendar year ends, many organizations prefer to “freeze” the data for a past period of time, establishing a “report of record” for that period.
Important things to know about freezing data
You can freeze data for any past time period. You cannot freeze data for the future, or for current fiscal periods (if you are in Q2, you cannot freeze data until you are in Q3).
You do not have to freeze data immediately after the period ends, and have time to confirm your data before freezing it. You can freeze data as far back as three years into the past.
You can add data to the supplier record if you discover new information today that was applicable back when you spent the money (e.g., you find out now that ABC was also a Veteran Owned Business in 2021).
You can unpublish (unfreeze) Time Machine data even after you freeze it – this is important if you discover a significant material item that needs to be adjusted after you publish the report. This should not be common but you can do it if needed.
How to Identify and Manage Key Vendors and Suppliers
Most organizations today deal with a very large number of vendors and suppliers. Effectively managing and monitoring all of them is an extremely difficult and sometimes even impossible task to undertake. Grouping your suppliers into those that are critical to your business operations and those that are less critical is one of the easiest ways to identify which suppliers your organization should be monitoring.
These relationships with strategic vendors and suppliers start with identifying your key vendors and monitoring their performance with agreed-upon metrics. Monitoring vendor performance, also known as vendor performance management (VPM) will help your company achieve the highest levels of performance from its key vendors and suppliers while also mitigating risk.
How to Identify Key Suppliers
Key suppliers, also known as critical suppliers or vendors, are suppliers that perform significant business functions or provide key goods or services to your business.
When trying to figure out if a supplier or vendor is critical, ask yourself these questions:
If the supplier fails to meet expectations, would your business encounter significant risk or damage?
Does the supplier significantly impact your customers?
Does managing the relationship and managing risk with a particular supplier require significant investment of resources?
Would your company’s operations be majorly impacted should you have to either replace this supplier or bring this supplier’s functions in-house?
You can also ask yourself these more direct questions as well:
If we lost this vendor, would it cause a material disruption to the company?
Would that disruption affect our customers?
Would the time needed to recover take longer than one business day?
If you answered “yes” to any of these questions, the supplier you have in mind is a key or critical supplier.
How to Monitor Your Critical Suppliers
Because your critical suppliers are vital to the success of your business, you’ll need to monitor them more closely than your other suppliers. Because of their necessity to your business, you should concentrate your monitoring in these areas:
Increased due diligence. Performing deeper due diligence may be required for a critical vendor. For example, along with your standard reviews and expectations, certain vendors may require on-site inspections. Also ensure that your critical suppliers are properly insured to cover any disruptions or data breaches.
More specific contract standards. You may need to review your contracts with your critical suppliers and include language that is specific to that relationship. This language should act as extra protection for your company, and spell out provisions and steps should products, materials, or services change at the supplier.
Identify and review fourth parties. When your suppliers contract out to other vendors, your risk increases. Know who your critical suppliers contract to, and determine if these fourth parties have access to critical, non-public information about your company.
Have an exit strategy. This conversation should be had with your critical suppliers at the beginning of the relationship. If your supplier is reliable and running a good business, they should have no issue with this conversation. Understanding what will happen if there’s a sudden loss or should the relationship need to end is important for both parties.
Best Practices for Managing Key Suppliers
Once your key suppliers and vendors have been identified, you’ll need to establish key performance indicators (KPIs) that you’ll track for these suppliers. These KPIs are generally agreed upon and contractual, so suppliers and buyers know exactly what standards and expectations they’re responsible for. When both buyers and suppliers know and understand vendor management KPIs, success is much more likely.
Common supplier management KPIs include:
Quality. This can relate to the number of operational failures, administrative errors, the actual quality of a purchased product, how quickly issues are resolved, number of coding errors, and the like.
Delivery. On time deliveries, lost in transit, or breakages during delivery, system availability/uptime, defect rates, or number of change requests completed on time.
Innovation. Product design improvements, material cost savings, proposals for system improvements and overall speed increases.
Risk. Products and services comply with laws and regulations, are financially stable, and uphold security requirements with no security breaches. Reputational risk should also be addressed.
When establishing KPIs for your critical suppliers, keep the following in mind:
Vendor management KPIs should be established for each critical portion of the product or service, and goals should be realistic and achievable.
KPIs should reflect the importance of the supplier relationship and also be both quantitative and qualitative.
Base your KPI goals on the minimum required level of performance.
If missing a KPI accrues a penalty, you should also reward a supplier for exceeding expectations.
KPIs should be reviewed and adjusted on a regular basis.
While critical suppliers and vendors often bring additional risk to your business, they also bring lots of additional benefits like innovation and cost savings. Appropriately managing and monitoring your key suppliers helps mitigate risk while building a strong foundation for your key supplier relationships.
SupplierGATEWAY’s Supplier Risk Management software can significantly reduce your supplier management workload while increasing your time to market. Schedule your demo now and see how our software can reduce your risk without halting your business.
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