How much do you really know
about your suppliers?
We would all like to think that we’re
in control when it comes to managing supplier content.
After all, how much supplier information do companies
really need to manage? Sourcing professionals need
specific information in their category-focused efforts,
ranging from past performance and supplier diversity
content to capability profiles. Tactical procurement
teams require up-to-date catalog information, pricing,
inventory, lead-time, and related insights. Financial
executives and A/P organizations need specific payables,
invoicing, and other related information. And operations
professionals and internal audit groups care—or
should care—about the chance of a supply disruption
or a supplier going out of business, not to mention
the impact of a decline in supplier quality and performance
on revenues and customer satisfaction.
While it’s easy to oversimplify the types of
supplier information that companies and individual
groups need to access, the above segmentation is decent
primer when it comes to deciding whether or not your
organization has the right approach and solutions
for capturing and managing supplier information. Above
all, it’s critical to consider the big picture
of supplier content needs across the board, covering
all of those in your organization who might need access—not
just procurement! By way of example, when we talk
to typical Fortune 500 procurement organizations about
supplier content, we often find a willingness to volunteer
the types of information that the company believes
it needs more information on. Quite often, this content
revolves around data enrichment to drive spend analysis
projects or supplier diversity programs. But while
important, these are only two of the areas that companies
need to consider capturing current and accurate information
on.
One of the other major challenges of supplier content
is the fact that most organizations are still focused
on batch-based enrichment, updates and management
efforts. As a result, it’s unlikely that the
information a company can access—say, information
on supplier performance or credentials—will
be current. Sure, you might say that months-old data
can be useful. But when it comes to making the best
possible decisions, wouldn’t you feel better
if you knew about last week’s supplier on-time
performance and quality levels versus last quarter’s,
and what credentials and certifications are current
today, not last year?
Without question, most of the companies that we meet
need access to more current supplier information,
including insights that come from both internal and
external sources. But there are still more areas of
knowledge that organizations need to develop about
their supplier base. A recent blog post on Spend
Matters refers to the need for companies to think
beyond information itself when it comes to managing
content. According to the article, organizations need
three things to optimally manage internal and external
supplier information. These three areas are: core
supplier content sources, a supplier content/information
management platform, and an analytics layer to make
sense and prioritize efforts and initiatives based
on current, relevant information.
We could not agree more with this list. But when
it comes to achieving to knowing what you need to
about your suppliers, perhaps the first step is getting
a handle on what it is you don’t know—and
aren’t considering today. At CVM Solutions,
we spend quite a bit of time working with customers
to explain how supplier content is central to the
entire procurement process. If you’d like to
spend a few minutes picking our brain about what types
of supplier information you should be thinking about,
don’t hesitate to get in touch. Because it’s
what you don’t know about your suppliers that
is more important than what you do!
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