Retailers; are you managing your suppliers or are they managing you?

January 7th, 2015

Are you getting the best products and services for the best price available?

 

In to many cases, for to many companies the answer to the question above is who knows on both sides of the relationship. And unfortunately this will not change for many companies.

Historically the primary driver associated with the use of reverse auctions and other related e-RFX tools has been to reduce the cost of goods and services and reduce expense in large part, if a retail company saved money it was deemed to be a successful process for the retailer as well as the awarded vendor. What about the other suppliers? What makes it a positive for them?

Supply base management or the attempt at it is the newest focus area of many strategic sourcing suites. Many vendors do not offer this functionality today; in fact some have trouble describing what it is when asked. Although elements of this functionality exist within a variety of surround type service offerings, no one vendor offers complete functionality in this area today even though they may think they do. A significant reason for this is suppliers concern with the thought of being managed at all because it means giving up perceived control. Additionally, retailers, suppliers nor vendors have agreed as to what the correct Key Performance Indicators (KPI’s) should be or how to collect the data that would allow you to manage them. As these types of tools are developed, the most successful supply base management tools will be those that can manage the largest supplier database to the continual benefit of both retailers and suppliers that participate and compete for their business

This author believes that the most probable result of this process will be a set of automated robust supplier scorecards that monitor and report on supplier performance versus a range of KPI’S that are applied against well-known quality guidelines resulting in a continuous improvement procurement methodology.

If you’d like to know how SafeSourcing can help improve and measure improvement in your e-RFX process please contact us!

As always, we look forward to and appreciate your comments.

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