Supplier management is a structured program to manage suppliers and improve their impact on the buyer's business. It includes managing vendor deliverables, working collaboratively to co-develop new processes, managing compliance as well as payment of invoices.
Supplier management ensures that a business gets the maximum value it is spending on its suppliers.
The management of suppliers is a crucial aspect of any business. It involves identifying, selecting, and managing appropriate suppliers and thoroughly evaluating their performance to ensure they provide the best value to the business.
Some benefits of supplier management include reduced risk (using an up-to-date supplier information management system). Moreover, suppliers can reduce the chances of fraud, including invoice fraud, while simultaneously eliminating supply problems as efficiently as possible. When a supply chain is consolidated, buyers can reduce the number of suppliers they work with, streamlining the purchasing process and making budgeting easier.
An increasingly globalized economy pushes organizations to increase their supplier base and find global suppliers. As a result, it is easier for organizations to manage their multitude of suppliers once they can establish an efficient supplier management process.
By managing suppliers effectively, an enterprise can target to extract maximum value for its business requirements and gain a competitive advantage. It can result in cost reduction through improved quality of sourced services and goods that determine the bottom line.
Advanced, cloud-based supplier management software can help enterprises ensure traceability and real-time visibility of supplier performance. A comprehensive set of supplier management tools within the software suite can also help an enterprise manage supplier information, supplier relationships and supplier performance, and drive greater value across the enterprise.