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CVM Supplier Diversity Blog

5 Ways to Strengthen Your Supplier Management Process

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As benign terms go, “supplier management” must be at the top of the list. Yet in the world of corporate procurement, no term may be as important. Supplier management is analogous to managing relationships and interactions with external organizations that supply goods and services to your organization. It is essentially your strategic plan for managing supplier resources that permeate throughout your organization. You need to meet the market’s demand for your products in a highly competitive global sourcing environment, and your suppliers must be right there with you.

A role within a supply chain management organization is to cultivate supplier relationships for the benefit of the company. Supplier management solutions allow you to build successful and sustainable supply chains, thus achieving transparency into how your suppliers are performing and the business value they are creating for your organization.  In most organizations, supply chain management impacts a wide variety of business functions: finance, operations, legal, information technology, human resources, and others. As these functions become engaged with your suppliers in support of the business, managing those relationships is vital to success and identifying and thwarting potential risks.

Here are five ways that help lead you to robust supplier management to strengthen your business:

1. Set goals: It is a simple consideration perhaps, but supplier management only succeeds if your procurement organization has well-defined goals of what you want to accomplish. Like in the military, your goals should involve readiness while reducing costs to your owners and shareholders. This requires coordination, detailed analysis, and a unified approach. For instance, some goals might be to develop new suppliers, enhance bid opportunities, resolve inventory management issues, and strengthen benchmarking and metrics. If any of these is the case, then your goals roadmap should reflect those priorities.

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2. Compliance: This starts with knowing who your suppliers and partners are. It does not mean mistrusting your suppliers, but simply monitoring their performance, which can be done through accessing supplier information from various reporting methods, including audits. The key is to be able track information about supplier performance systematically through automated supplier management solutions that spot issues immediately.

3. Technology tools: Cutting-edge software and technology tools are on the market and are invaluable for maintaining sufficient leverage over suppliers. This is especially important when operating in uncertain regulatory environments where mistakes can adversely affect the business. Suppliers must be managed continuously to ensure you have appropriate data to sufficiently track the current status of your supply base as well as the quality of business relationships. A variety of tracking tools on the market automate supplier management software systems, collect and classify data on suppliers and their activities, and provide records and documentation in real time.

4. Outsource services: Business environments are increasingly complex, especially in today’s global procurement environment of tiered supply chains. More often than not, your organization can’t always do the work that must be done. You may not have the expertise in-house, for instance, to manage sophisticated supplier relationships. There are a number of third-party organizations in the marketplace that can address gaps in your processes for supplier management and offer hands-on solutions. Their tools allow you to leverage and align your internal expertise with external resources. Effective supplier management relies on tracking tools, and outsourcing functions can be central to ensuring the job gets done.

5. Monitor social media: Emerging social media platforms can be a boon to supplier management when seeking information on your suppliers. Companies today must have a social media presence, which is often tied to their corporate culture and activities, sales and marketing, finances, business relationships, and ownership changes. All of these elements can impact sourcing and should be monitored frequently through real-time alerts, newsfeeds, announcements, and other platforms. In the era of social media, supplier management must go beyond a spreadsheet and follow information wherever it surfaces.

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For over a decade CVM's mission has remained unchanged: lead the transformation of Supplier Diversity program management and support Supplier Diversity programs. CVM helps corporate supplier diversity programs in every stage of their evolution; from those that are just getting started, to the most advanced, world-class programs. Equipped with unparalleled data intelligence, superior technology and expertise guidance, businesses can effectively establish and advance their Supplier Diversity initiatives.