No matter the industry in which they are operating, the success of an enterprise depends on its ability to develop creative and collaborative partnerships. For firms that depend on supply chains to deliver their products and services to the marketplace, proactively managing relationships with suppliers and continuously tracking and monitoring supplier performance is critical for maintaining operational efficiency, ensuring business continuity, satisfying customers, and thriving as a business.
Forward-thinking firms use the latest, technology-driven supplier management tools and techniques to promote collaboration and transparency and to avoid disruptions across the supply chain. With tools like digital supply networks and collaborative multienterprise work management technologies, organizations can build sustainable partnerships and create shared value for all partners in the supply chain. This type of effective supplier management enables firms to maintain lower inventory levels, shorten cycle times and lead times, and improve supply chain agility and resilience while meeting customer or patient demand on time and in full.
Supplier management defined
Supplier management is a blanket term used to refer to the activities involved in supplier relationship management, supplier performance management, and supplier risk management. Supplier relationship management involves the work of discovering and validating suppliers, establishing connectivity with suppliers, assessing supplier assets and capabilities, and planning and executing interactions with suppliers to achieve greater value from the buyer-supplier relationship. It is about establishing mutually beneficial relationships between a company and the suppliers on which it depends.
Supplier performance management, on the other hand, involves the measuring and tracking of supplier performance to cut costs, identify areas in need of improvement, and ensure that suppliers are achieving the desired level of performance and efficiency. Supplier risk management, which is an essential part of supply chain quality management, involves the processes of evaluating and managing relationships with suppliers based on the level of risk, or the potential for harm or benefit, they pose to the buyer organization. When done right, supplier management helps firms curate lasting partnerships with key suppliers, building collaborative, productive partnerships that they can depend on to add value to their products and their businesses.
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Supplier management tools
One of the easiest ways firms can improve how they manage suppliers and enhance buyer-supplier relationships is through the use of a supply chain management system, or digital supply networks and specialized supplier management tools. They can use cloud-based supply chain networking technology and multienterprise work management software to facilitate seamless, self-service data and document sharing and foster collaboration across trading partners. They can use digital network platforms to view and track supplier information and leverage supplier management tools to streamline supplier performance management and risk management tasks. These tools make it easier and less time-consuming for suppliers to provide their partners with up-to-date information about their materials, equipment, and processes. The tools also make it easier for buyers to access, aggregate, and analyze information and glean insights they can use to increase operational efficiency.
Benefits of using digital supply networking technology and supplier management tools
By combining the use of digital supply networks and supplier management software, organizations enable frictionless connectivity, constant communication, and close collaboration between their teams and those of their supply partners. They get a fully integrated view of all supplier and other third-party provider data to inform decision making and supply chain planning. They can more quickly assess and mitigate risk, find areas in need of optimization, and strategically manage costs throughout the supply chain. They can respond proactively to unexpected change in supply or demand conditions and take coordinated action to minimize the impact of delays, disruption, and other unexpected supply chain events. And they get the actionable insights they need to enhance supply chain agility and boost efficiency and productivity.
The future of supplier management in the pharmaceutical industry
TraceLink's supply chain solutions for the healthcare sector are transforming pharma supply chain management. TraceLink's multienterprise work management applications are a new type of network-based collaboration software that help supplier management teams streamline and digitalize shared work with suppliers.
TraceLink's digital supply network and supplier management toolset provide firms with greater visibility and control over their supply chains—visibility and control they can use to continually track, monitor, and improve the quality of products and processes across the supply network. Through a secured collaborative workspace, key stakeholders at pharma companies and their partner organizations can post and comment on quality review documents, execute changes, and track and resolve incidents—working together to reduce risk, drive compliance, and create a more efficient and agile supply chain.
Find out how pharma and healthcare organizations are building resilience and agility in the aftermath of COVID-19. Download the IDC Whitepaper: Solving the Pharma Supply Chain Struggle.
Supplier Management FAQs
What is supplier management?
Key supplier management processes include proactively monitoring, assessing, and managing supplier risk, supplier performance, and supplier relationships to reduce supply chain costs, shorten product development cycles, decrease lead times, and improve supply chain agility and resilience.
What is the supplier management process?
The supplier management process includes activities like identifying, qualifying, and onboarding new suppliers, transacting with suppliers, regularly auditing and managing supplier performance and risk, and collaborating with suppliers to ensure supply chain stability and obtain greater value from buyer-supplier relationships.
Why is effective supplier management so important?
Effective supplier management helps ensures that product and process quality standards are consistently being met by their suppliers. It enables organizations to mitigate supplier risk, meet regulatory compliance requirements, reduce supply chain costs, foster corporate social responsibility, and drive innovation and mutually beneficial value-creation through collaboration.