Cracking the Efficiency
Code
with Supplier Portals
It was not very long ago when many procurement organizations kept
their supplier master on index cards, tucked away in a windowless
corner of their corporate offices (ideally located somewhere in
between the tactical purchasing group and the accounts payable
organization). While most of us have come quite a long way since
then, few companies have implemented standardized approaches to
gathering, structuring, and collaboratively sharing data about their
supplier community. Even fewer have moved this model into an
environment that enables procurement organizations to let suppliers
do the heavy lifting in regards to registration and information
management.
This is not for lack of trying. Some companies we
speak with have implemented eRFX and sourcing tools that capture
supplier information in the context of specific sourcing events.
Others have deployed procurement and catalog management systems that
capture catalog and related information from indirect, MRO, and
services suppliers, in order to automate specific ordering processes
while reducing maverick buying. Still others have deployed specific
tools to manage information for a select group of suppliers (e.g.,
their diversity supply base). But these approaches only capture a
subset of supplier information specific to the jobs for which they
were intended. And perhaps most important, they only do so in a
periodic manner for a limited percentage of the supply base. That’s
why these supplier management efforts, while valuable in the context
of the activities for which procurement deployed them in the first
place, come up short when it comes to effective supplier management
that cuts across an entire company.
What companies need, in
our view, is a common repository to manage and access supplier
information. The secret to building this type of capability is not
by deploying a solution that focuses on enabling specific
procurement activities, but rather on general information capture,
validation and management itself—as a specific task. For this
reason, supplier management portals, which automate the collection,
management, and centralization of supplier information, are critical
elements of any holistic supply management strategy. Self-service
supplier management portals drive suppliers to manage their own
information while also validating that the information provided is
timely and accurate. This enables supplier managers to take control
of a significantly greater portion of their supply base, managing by
exception and creating an entirely new level of efficiency.
Companies evaluating supplier management portals should ensure that
the approaches they’re considering include flexible supplier
registration capabilities across their overall set of categories and
programs (e.g., supplier diversity management). At the same time,
procurement organizations should also make certain that the portal
solution automates the prequalification and routing of potential
suppliers to the appropriate parties in the business. This automated
data collection and analysis process might involve collecting
supplier reference information, validating information against third
party and internal data sources while then proactively alerting
category managers of new suppliers that meet their specific
requirements and needs. In addition, supplier management portals
should provide automated workflows, tracking, change notifications,
reporting and related management and outreach capabilities. Ideally,
solutions should tie this information to third-party supplier
databases as well to allow internal sourcing stakeholders to
identify and engage potentially new suppliers that an organization
might not be doing business with already.
Without question,
supplier portals can serve an invaluable role inside virtually all
procurement organizations. Nevertheless, if you start in a focused
manner by targeting portals in one area, treat these as one-off
efforts. After all, the most significant returns from supplier
portals come from engaging all of your suppliers – across
categories, regions and geographies. | 
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