Congratulations! You are the owner of a small business that continues to grow and evolve! The popularity of your amazing product has meant bringing on a LOT more suppliers to ensure you have plenty of resources to get the parts you need to continue manufacturing the thing you make that everyone wants to buy.
Unfortunately, adding all that to your existing supplier base has become unwieldy and confusing. You don’t see how you’re going to be able to keep track of everything so you’re not paying too much, buying parts you don’t need yet, or simply keeping all your contracts straight.
It’s probably time for your company to look into purchasing and deploying Supplier Management Software.
Supplier management is the practice of organizing supplier company information such as contacts, payment information, and terms and contracts.
If the success of your business depends on the ability of your suppliers to fulfill their responsibilities in a timely manner, using a supplier management program will be the most effective way to keep that on track. The Ariba Network, now known as SAP Business Network, is a great way for suppliers to interface with your organization as part of an overarching supplier engagement strategy.
A successful relationship between buyer and supplier can best be achieved with clear communications between both parties. That means all responsibilities of each party are satisfied within the agreed upon timeframe. This will establish trust between both parties as the business relationship matures.
While this sounds fairly simple, this process can take years to fully build, test, and deploy. And it’s inevitable that you will encounter some kind of turbulence along the way.
So, what can you do to best prepare yourself and your company to take this step?
Depending upon your situation you might not have a choice but to set your company up in an existing system because that’s how your customers are sending orders.
If that is the case you can take the simple route to fully utilize that system and require all of your suppliers to establish a relationship with your company and manage those records within the platform.
If your business isn’t required to utilize a specific system and you need to make a choice, here are five tips for how to choose and prepare to implement a new supplier management system:
Moving to an automated supplier management system can completely alter the way your business is run and how it interacts with your suppliers. We recommend starting with a Project Manager that will act as the Team Lead. This individual is responsible for all planning, budget tracking, coordination of meetings, creating meeting minutes/notes and is the key point of contact for the team.
Depending on the complexity of the program your business is utilizing, you might also need implementation specialists, change management support or an integration specialist if you plan to integrate to an existing ERP.
Throughout the business relationship you will have data that needs to be organized and maintained such as contracts, addresses, banking information, and contact details. Decide on what is relevant to your business and how you want to maintain that information.
Many companies choose to give the supplier the ability to update this data on their own. That helps ensure that your records are always up to date.
Some suppliers are more important to your business than others. Consider setting up a ranking system, such as from 1 to 5, to prioritize those in order of importance.
You could also segment suppliers across different business sectors such as IT, Office Supplies, Janitorial Services, Security, Transportation, etc.
What does your business want to get out of this program? Are you simply looking to have contact and contract info available or will this program go to the extent of utilizing global tax information to properly process all electronic payments? Knowing your end goals will help your consulting partner create a roadmap for success.
Let’s be realistic, there are going to be problems/concerns at some point in the project. Some may be based on unclear communication, not fully understanding the needs of your business until a configuration is done, or any number of unexpected other issues that can arise in the process.
We recommend having a plan in place to deal with these delays. An example of this process would be a RAID log (Risks, Actions, Issues, Decisions). This would be managed by the Project Manager and can be as simple as an excel workbook that maintains accountability for any issue that arise and sets an expected completion date for each task.
Regardless of which platform you choose, or even if you decide to fully buy in to a system that you’re already using for orders, working with an experienced consulting partner to help you get set up and train users can make the entire process much easier.
We’re the experts.