What is supplier management?
As claimed by Investopedia, it refers to the act of identifying, acquiring and managing resources and suppliers that are essential to the operations of an organization.
It is, in fact, a huge part of your company’s business strategy. Supplier management is as critical as customer relationship management. Without the ideal suppliers and a hiccup-free supply strategy, your whole business might be in jeopardy.
What is supplier relationship management?
Perhaps the most influential part of supplier management is supplier relationship management (SRM). SRM is the strategic approach to managing the relationship between your company and its suppliers. It’s equal parts supplier management, risk management and contract management. Both analytical and creative, a supplier relationship manager should deal with company-to-company relationships – several parts seeking added value and business growth.
In Maintenance, suppliers are partners. Having to deal with several of them, a partnership with a supplier might be the difference between possessing a cog in the machine of your company’s operations or a well-oiled enterprise. After all, contract lifecycle management is a key part of supplier management.
Deal with your suppliers with care and not as a consequence of a need. Let the collaboration flow and become partners with them, instead of the other side in margins-squeezing warfare.
If you’re interested in the art of communication with partners and clients alike, take a few notes from our article on how communication drives better maintenance.
What are the advantages of supplier management?
“Yeah, right. You’re painting a really nice picture, but can you give concrete examples of the benefits of having better supplier management?”
Sure thing, boss!
According to Procurement Tactics, 63% of U.S. retail companies have troubles with their supply management processes, resulting in substantial delays and re-stocking nightmares. Nightmare on Elm Street would seem like a kids’ movie compared to the horror you may experience if you don’t improve your supplier management. It goes without saying that it benefits companies from a financial standpoint, by either lessening supply disruptions or just because you can negotiate better deals when you carry a holistic view of supply.
A Deloitte study on supply chains shows that companies with better supplier management have significantly above-average revenue growth and EBIT margins when compared to their peers. Improved results – or the ability to catch up with a market leader – are another benefit of a good supplier management strategy.
Finally, when suppliers are treated as partners and long-term relationships are developed, innovation and improved quality of services and goods usually follow. It’s a win-win situation, really.
Why a supplier management platform is essential
Data is everywhere. Big data, small data, all things analytics and statistics. There’s a reason why, though – it helps you make informed decisions and decrease error margins.
SRM is a truly growing market and its expected compound annual growth rate is +14% until 2026, but three-quarters of Chief Procurement Officers (CPO) say they feel they don’t have enough metrics to gauge the success and health of their supply chain.
It doesn’t end with metrics, though. The time spent on the phone with suppliers, the constant time-wasting, repetitive tasks that end up blocking operation efficiency, and ultimately budget setbacks.
Supplier management can be a nightmare without the right tools to help you. A platform that helps you find and manage suppliers, and manage multiple quotes in order to make better, cost-cutting purchasing decisions and that ultimately makes your life easier by inserting you into a community of buyers and sellers in a shared market.
How to improve supplier management?
👉 Make smarter decisions
Procurement officers and facility managers can spend too much time on the phone and e-mail without the appropriate solutions in their hands.
The complexity of managing quotes, purchases and sales altogether is daunting and that’s why whole procurement departments exist in companies. Contract management, supplier lifecycles, and competitive quotes – all can be done without hassle with the right platform and organization.
👉 Hire an SRM specialist or upskill your team
A unique kind of person is needed to manage the relationships with your suppliers. Someone who is both tough enough to negotiate the better deal, but sensitive enough to understand the other side and their own processes and goals.
Not only that, but having a person entirely dedicated to the supplier management strategy is a must – in such a critical area for your business, you don’t want to leave it unaccounted for.
In this current labour market, hiring can become a real pain, so give a shot to one of your current employees and upskill them. Train your team to become specialists and help them evolve their careers without the annoyance of an adaptation period or fit concerns.
👉Communication and collaboration are keys to success
Supplier management follows a B2B protocol. Both companies have goals, expectations and their own workflow. A disruption in the supply chain will benefit neither party, so communication is vital in order to maintain trust and avoid money losses. Transparency and open channels of communication must be at the top of the table at all times.
It all boils down to collaboration — which is, by the way, one of the focus topic of this year’s IFM. If both parties look at each other as business partners, there’s room for innovation, growth and added value. So, remember: it’s always a two-way conversation. Be reasonable and practical.
The future of supplier management in Maintenance
Supplier management is a growing market and the future is a bright one.
For starters, technology will assume a fundamental role in this market. Technological offers will evolve and adapt better to the needs of both suppliers and the supplied. Supplier information management will become easier, analytical tools will become more complex and solutions to solve the problem of supplier search will become available.
In a post-pandemic world, where cooperation is king, supplier management will also become smarter and shared know-how will make it more unchallenging and open. As a consequence, productivity will increase, as will innovation and creativity in the industry.
We’re glad to present… The Infraspeak Network™
A complex and sometimes boring task doesn’t need to remain that way forever. Supplier management can be quite creative and exciting when it is stripped of its tedious routine.
Infraspeak Network™ is a shared workspace that introduces collaboration to procurement and work-execution processes between facility and maintenance managers and vendors, suppliers, contractors and facility service providers.
The Infraspeak Network™ simplifies everyday processes like quote requests and proposals, sharing work orders and monitoring maintenance carried out by suppliers. These newly enabled workflows allow you to do the following from the comfort of your Infraspeak platform:
✔️ Expand your Client/Supplier base and book of contacts
✔️ Manage quote requests and agree on proposals for work orders and purchase of stock.
✔️ Execute contracted maintenance work more efficiently.