Managing Multiple Suppliers

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Introduction

Managing Multiple Suppliers

Supplier Visibility

Promoting Best-Practice

Supply Chain Interactions

Features and Benefits of Supplier Portals

Supplier Portal Innovation 3

Supplier Flexibility4

Increasing Supplier Numbers

Key Supply Chain Requirements5

Auto Best Buy Supplier Qualification5

Document Management6

Multiple Trading Formats 7

Supplier Determination7

Product Information Management7

Product Catalogue8

Price Negotiation8

Business Intelligence8

Celtrino:9

Introduction

This is a comprehensive guide to help buyers maximise the value of interactions with multiple suppliers. In this guide, you’ll learn how to align your view of the supply chain with your suppliers’ - to improve collaboration, reduce errors and take way management overheads.

Is your supply chain strategic for your business? Can you remove stress and bottlenecks? Most businesses run the risk of outgrowing their existing supply chain processes. We’ll discuss how best-practice supplier management can improve a whole host of key business processes that offer advantages to both parties and critically, the end customer.

Managing Multiple Suppliers

A key objective of Supplier Relationship Management is to derive maximum value from suppliers by having consistent and efficient processes in place that help develop better relationships. It’s hard to define standard practices without having an enterprise-wide assessment of supplier engagement. Only by developing a full picture of supplier performance, can it be improved.

What are the challenges to managing multiple suppliers?

Supplier Visibility

Without full visibility of suppliers and their ways of doing business it’s challenging and costly to manage them. It’s vital to have accurate and updated supplier and product information to bring accountability to information sharing.

By having communication lines open and sharing clear expectations of service levels, performance standards and corrective measures, buyers can standardise collaboration with suppliers and prevent business disruptions.

It’s critical that buyers gain an effective understanding of current Supply Chain costs and the value derived from established processes. With an accurate assessment of supplier activity buyers can begin to simplify the ordering process, minimise risks and create improvement plans.

Promoting Best-Practice

Having key processes automated and standardised in areas such as supplier qualification, product sourcing, ordering, promotions management, delivery and payment, makesit easier for suppliers to comply with your internal process.

With a standardised approach to supplier management, it’s possible to maximise supply chain accuracy and timing, identify supply problems and improve document and payment processing. With clear cost advantages to both parties, the best way to seek continuous improvement is to gain a single unified view of supply chain activity.

Read on to find out how.

Supply Chain Interactions

The larger the pool of suppliers you have the greater the difficulty in managing them without the right solution

Just carrying out normal supply chain interaction like sending orders, receiving invoices, invoice matching and payments becomes infinitely more complex.

Different suppliers have different ways they want to interact, it can be complicated to get them to sign up to a single process.

There’s very little consistency from supplier to supplier based on how they’d like to interact with you.

If I you don’t have a way to get them to comply, buyers end up having to integrate with them in many different ways.

Some larger suppliers have complicated, integrated communications that buyers have more difficulty engaging with. At the other end of the scale some small suppliers have limited back office capability and prefer non-sophisticated ordering.

From small artisan food producersto multi-national with of thousands of products, the critical issue for buyers is standardising interactions with all suppliers to increase efficiencies.

To order goods effectively, buyers must know exactly what goods are possible to order. They must submit the order in a format the supplier can interpret, which allows them to respond easily. They must be able to receive those goods and inform the supplier of any discrepancies.

When the supplier requests payment for those goods, they must confirm that it’s a valid request for goods that were received at the agreed price. Only then can the invoicebe paid with confidence. Any delays, confusion or dispute between the parties will increase costs for the buyer and supplier which can damage the relationship and impact future business.

Features and Benefits of Supplier Portals

Supplier portals can vary hugely in functional scope and ease of use. An advanced supplier portal puts standard business rules (set by you) in place to send and receive documents and manage your community of suppliers.

An effective portal is made up of services and workflows that add business value to supply chains. Shared visibilitymakes it much easier to interact with suppliers and validate & maintain accurate information.

An advanced portal manages your suppliers, products and prices with a single unified view of supply chain activity. It automates electronic document processing, integrating workflows and collaboration.

It helps buyers:

• Automate the processing of all supply chain documents, ordering, delivery and invoicing
• Define and control supplier relationships, collaborate and remove barriers.
• Gain complete visibility of all trading activities and engage seamlessly with trading partners
• Manage your product information and pricing attributes
• Access product catalogues, compare supplier prices and trading abilities
• Quickly identify and resolve emerging supplier issues

With a single pipe for sharing information, a portal provides your business with clean data and added business intelligence. Managing as many suppliers as you like, a portal applies industry best practice and is scalable with your business.

Supplier Portal Innovation

TradeHub:Buy from Celtrino is a powerful supplier portal that’s purpose built to manage the complexity of dealing with multiple suppliers.

Buyers have a single process to interact with the portal. Once you’re integrated into TradeHub:Buy you send orders and receive responses in a single format. Product information is consistent across all suppliers.

Supplier Flexibility

TradeHub:Buy also gives suppliers options. There could be a large multinational supplier that wants to use sophisticated communications, integration and messaging. They can send all messaging through their chosen communications platform using their preferred format, the portal converts that into the format the buyer wants.

Smaller operations may need to be provided with a user interface to allow them to view orders and documents in your supply chain and produce a response in the form the buyer accepts.

To carry out interactions that a sophisticated ERP system would, they don’t need complex back office systems or to be technically proficient. The buyer’s interaction with the portal is standard, even if there are different types of supplier interactions at the other end.

Increasing Supplier Numbers

Many buyers would like to add more suppliers but can’t manage or justifythe overhead. Because some suppliers require a complex exchange of information, buyers may not have the processes in place to allow them to grow the supplier base.

Buyers may have to pick suppliers based on their own IT capabilities rather than the products they really need. Buyers could be losing out on value by limiting their pool of suppliers because they can’t cope with the complexity of dealing with so many.

The benefits of having more suppliers are;

• Broader range of products
• Getting products at a better rate
• Better proposition for customers
• Offering more competitive pricing

Using TradeHub:Buy, the buyer now has just one format for orders and order responses. It’s always consistent and it’s always validated. They are free to add as many suppliers as they wish.

Key Supply Chain Requirements

Auto Best-Buy Supplier Qualification

Buyers need to impose certain restrictions and standards on their suppliers. TradeHub:Buy automates that. Buyers may decide to only deal with suppliers who have certain standard certifications. In the food business, for example, certain inspection certifications are required.

Mandatory quality and technical specifications can be rigorously tracked and maintained from all your suppliers for compliance with procurement policies and KPIs.

The supplier qualification service imposes workflows on the supplier that allow them to upload their documentation for review. The buyer can approve them, and if there’s an approval period, define how long it is.

From the beginning, the on-boarding service makes it very clear for suppliers exactly what is required to go live.

The buyer defines;

• The list of criteria that must be met
• The information suppliers must provide
• The level of interaction expected.

The portal also allows the imposition of certain limits. If an inspection certificate or tax clearance certificate is required, they can be reviewed and accepted and then reviewed again at a given date in the future, prior to expiry.

It provides a single reference point to complete and customize workflows to meet the buyer’s needs. It gives the supplier a clearly defined set of actions to start doing business.

This information is provided in a single point to suppliers, so it reduces the back and forth in getting them set-up to trade.

TradeHub:Buy has a range of standard interactions that suppliers can adopt. These interactions are based on industry standards that are supported by the portal. This promotes a standard for suppliers to interact which makes it simple for them to engage. It also makes it easy for smaller suppliers to interact, even with limited back office capabilities. The service allows buyers to let the portal take care of the on-boarding process.

Document Management

Different supply chains have different transactions they expect to carry out. While some suppliers just want an order and then an invoice, some require order responses, despatch advices and goods received notes. The system selects which transactions the buyer expects the supplier to carry out.

All documents that go through the system pass through validation, to make sure they are syntactically correct, but also impose any business rules required.

For example, to ensure that;

• Invoices contain a valid purchase order number
• Order responses are received in a fixed time from order receipt

The system automates the accounts payable process. Invoices are validated against the quantities received in a goods receipt note and the pricing from an order response. It takes work away from the buyer because when the invoice is received they know specific criteria are already met.

If there are any discrepancies with an invoice the system automatically informs the supplier, it puts the onus on them to correct the mistake, rather than having to interact with the accounts payable department in your business.

Multiple Trading Formats

EDI automates the exchange of business documents between companies. Data is formatted to travel directly between trading partners’ computer systems. There are a number of functioning standards in existence which govern how EDI documents are shared. Edifact, Tradacoms, ANSI X12, UBL and BIZ XML are all examples of EDI messaging standards used in various countries and industry sectors.

The adoption of EDI has resulted in several data formats and interfaces that trading partners must support to do business with each other. As a result, dealing with set-up variations and testing requirements is complex.

Users of outdated legacy EDI systems may have to support over 20 different interface file formats for each trading partner. Internally managed EDI systems are often ill-equipped to meet the requirements of trading partners and can even require manual set-up.

TradeHub:Buy allows buyers to treat all suppliers the same, irrespective of their size, location and technical ability.

There’s one standard set of transactions for all suppliers. The buyer only has to support one business interface. TradeHub:Buy offers the flexibility to apply standard business rules to trading relationships with all suppliers.

Supplier Determination

TradeHub:Buy gives more flexibility and control over the standards imposed on suppliers. There’s a suite of tools that help with more complex business models. If there are multiple suppliers for a given product, the system can receive a single order and go through supplier determination workflow to determine availability and best price for each product.

If any goods can’t be promised by the supplier, the system automatically orders them from the next best supplier, until it has exhausted all potential suppliers and prices of a given product.

Product Information Management

Product information management provides buyers with a single repository for all their product information.

This can be information like;

• Product names and descriptions
• Supplier codes and buyer codes
• Pricing information
• Supplier and product availability
• Allergen information
• Promotion information
• Discounts and rebates
• Status sheets based on the products

Any aspect of a product can be stored in a central location to give a single, company-wide view of that product. The system puts the onus on the supplier to maintain the integrity of the information. When a supplier updates a product or price attribute, the buyer is informed and can review the changes. This can also be automated so that changes don’t have to be approved.

TradeHub:Buy allows the buyer to know what pricing has been agreed for any product. In the event of a dispute over the invoice, there’s a common reference point for the agreed price.

Product Catalogue

For buyers, the process of deciding which products to buy from suppliers can be very manual. It involves looking at product catalogues and making manual lists of items to order. The supplier portal is underpinned by a product catalogue.

If a product goes out of stock, it’s time consuming to view alternatives. With TradeHub: Buy it’s a simple transaction to look on the supplier catalogue, see who else is supplying the same product, or even a comparable one, to cover the shortfall. Buyers can manage suppliers and establish relationships with multiple suppliers of the same product and accept offers from any of them.

Price Negotiation

TradeHub:Buy makes the suppler responsible for updating product information and product lists. The buyer has a single view of products they want and who to buy them from. They can set-up multiple suppliers for a single product and let the best price determine which supplier wins the order. The buyer can chose to accept the offer and decide the period to take it for.

Buyers can effectively play suppliers off against each other. If there are multiple suppliers competing for a product, and they know the decision is based on best price. The portal encourages suppliers to offer a more competitive price to win more business.

Business Intelligence

Across all the functions in TradeHub:Buythere’s a function which gathers intelligence and provides reporting. Most services and workflows within the portal come with reports out of the box. When using order response workflow, a supplier service order report is available which gives a view of all suppliers and the service levels they are maintaining.

For the accounts payable service there’s reporting on supplier invoice accuracy. This helps when;

• Suppliers create a large amount of errors in their invoices
• Supplier indiscipline is a problem
• Invoices are still outstanding
• Invoice approval and settlement information is required
• You need to create custom reports

Celtrino:

Your partner for Supply Chain Excellence

At Celtrino, we make business easier and more profitable for our customers and their trading partners. Our pioneering Supply Chain Management eco-system delivers innovation and expertise to transform the way you do business.

We’ve been at the heart of supply chain innovation for almost 30 years. That positions us to help companies transact business across complex supply chains with total confidence. We drive down the cost and increasing the scope of our customers to trade successfully.

We’ve put all that experience and expertise into our new product TradeHub:Buy. It’s a powerful portal that’s purpose built to manage the complexity of dealing with multiple suppliers.

Find out how TradeHub:Buy can help you Manage Multiple Suppliers. Speak to a Supply Chain expert today.

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