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Posts Tagged ‘supplier management’

How Important is Supplier Management for Procurement Efficiency?

Tuesday, September 18th, 2018

Procurement managers are faced with unusual situations quite often. The very nature of their job entails an unexpected environment where changes take place abruptly and for the sake of efficiency, one needs to be prepared.

Suppliers are an integral part of the procurement system and a lot depends on the efficiency of suppliers and the services as well as goods they provide.

Most organisations grapple with the problem of unreliable suppliers, huge supplier costs and low quality of goods and services and hence forth invest in top procurement companies or the best sourcing companies.

The question then arises, what can be done to ensure that sourcing and in turn supplier management is a smooth, hassle free process.

Supplier performance

Analysis of supplier performance is the primary step to ensure an efficient supplier function. An organization that doesn’t periodically review supplier functions tends to regret it eventually. Supplier performance needs to be understood on the basis of quality of goods, timely delivery and cost effective.

If a supplier who supplies quality goods to your organization but charges an exorbitant price; is not a value addition to your procurement process. In fact in the long run, the vendor might be a liability.

Financial Analysis

From expected cost to actual cost, purchase price variance to vendor payment history are some key performance indicators of how your organization is performing.

It is important to review payment history to ensure that delay supplier payments are not taking up huge interests and the contracts that are made up are for the mutual benefit of both organisations and vendors.

It is also crucial to conduct a comparative analysis of existing vendors and draw up a conclusion of vendors that are performing and vendors that are not contributing to the holistic growth of the organization.

Considering the trend of changing business practices and the increasing popularity of sourcing solutions, businesses have begun to outsource essential functions in an effort to focus on core areas.

Using internal resources for management of sourcing, vendors and payments takes away from the efficiency of business processes and leads to an unbalanced organization framework.

The changing trend also owes its popularity to the success of outsourcing these functions. Studies have shown a marked improvement in the performance of organizations as well as ensured the implementation of a successful vendor management system.

If you would like to understand the benefits of sourcing solutions for your organization, you can get in touch with us at info@vpurchase4u.com or visit www.vpurchase4u.com

 

Supplier Management : How It Benefits Your Business

Thursday, September 6th, 2018

Supplier management is the core of a successful procurement strategy. Many big organisations make the mistake of assuming that supplier management is a seamless process which doesn’t require too much effort or planning. On both accounts, this doesn’t hold true. Supplier management companies in Delhi and procurement agencies in India concentrate on the core processes of your business and thereafter bridge the gaps between input and output.

Every process needs to be measured in an effort to understand its effectiveness. If a process isn’t functioning at its optimum, it’s doing more harm than good. Now, in respect to supplier performance, it can be measured both qualitatively and quantitatively. The measure differ from organization to organization but broadly are the same as – on time delivery, quality, price and cost. For a professional procurement agency, this is an inbuilt part of the analysis and report generation process, however it is essential to analyse, investigate and hence act upon the findings.

Expert advice

Procurement experts offer strategic advice and help you with all problems relating to sourcing, vendors and market intelligence. It is crucial to constantly analyse how and if suppliers can resolve problems, what is the kind and extend of support they provide and how much focus is given on new product development. Suppliers who understand the need of your business and fulfil it accordingly should be among your top preferences, though market research should be an integral part of your primary process.

Treat your suppliers differently

Suppliers are all different and it is essential for the procurement team to apply well-defined principles to ensure a strategic process is implemented for an efficient framework. Typically 20% of your suppliers constitute 80% of your indirect spends and it is vital to conduct periodic checks on your business. It will also greatly help your cause, if the suppliers you work with constantly device new plans to ensure the most cost effective processes for your organization.

For any business, new or established, the process of procurement is the most essential and should be enhanced at every opportunity. Be it a new market intelligence gathering strategy or a new set of products for which the organization needs suppliers – research, investigation and implementation is the appropriate way to proceed.

If you’d like to understand more about supplier management, procurement or source to pay, you can get in touch with our experts at info@vpurchase4u.com or visit www.vpurchase4u.com.

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