“According to AMR Research/Gartner, supplier management organizations increased their employee headcount and system resources by 35 percent, and are spending up to $1,000 per supplier annually to manage their supplier information across the enterprise.”
Having an effective and cost-efficient system to manage your company's supplier/vendor information is critical for increasing efficiency, maintaining strong relationships with suppliers, and keeping costs low. Here are four key ways that the right vendor management software can benefit your organization by resolving common problems.
1. Unify Fragmented Information
In larger organizations, supplier information can be fragmented across departments or regions.
Supply and Demand Chain Executive highlights that a lack of correct, synchronized supplier information can mean "supply chain, sourcing and buying teams struggle to get access to a single view of the supplier so they can understand the total supplier relationship across the business."
A centralized place for all Vendor Relationship Management (VRM) info to be stored can be essential for preventing fragmentation. For example, at Routeique™, vendor details can be viewed at any time through our digital control tower. All changes immediately sync, so all team members have the most up-to-date information at their fingertips on desktop or mobile.
2. Enable Clear Communication
The Boss Magazine writes, "As a buyer, the development, production, and delivery of a product are completely dependent on suppliers, and one of the biggest challenges to the buyer-supplier relationship is failure in communication." The publication also notes that teams might use multiple platforms to communicate with suppliers, such as email, texts, spreadsheets, and phone calls.
The Routeique™ system allows for open communication in both directions. It helps you stay up to date with product orders, delays, or changes to a vendor's policy. Additionally, our order management system helps to create a streamlined flow of information through automatic PO submission and shared receiving reports.
Learn more: Order Management
3. Enhance Visibility
To make the right decisions about what your organization needs, complete and accurate data is essential.
The Routeique™ system includes a robust inventory management system so you can always be sure of what you have on hand. Additionally, we help businesses work towards increased product management and supply chain visibility, but towards supply chain synchronization, allowing for transparent communication between partners and a clear definition of roles throughout your network.
4. Help Discover Hidden Costs
Following from our previous points, a lack of visibility isn't just a problem because it creates difficulty accessing information: it can make it harder to make cost-effective decisions.
When you're not effectively managing your vendors, it can be easy to end up overpaying for certain goods and services, lose money on hidden costs, or even just miss out on value.
What do we mean by "hidden costs"? Supply and Demand Chain Executive provides a useful example from the healthcare industry: "Whether it's inventory, administration, or transport, items and tasks can slip through the cracks. Months or years down the line, those missing items and tasks resurface during a spot-check or annual audit." Inventory and streamlined organization around the transport of these items, they say, can make a significant difference.
Similarly, Informatica provides an example of an international company wasting a significant amount of money each year because their downstream procurement and upstream procurement teams were operating independently of one another and storing and managing the data in separate "silos". This made it impossible for them to get a full overview of their vendors, vendor relationships, and products and services.
Having all of your vendor information centralized in an accessible way can help prevent this kind of issue.
Learn More: Vendor Management Tools
Putting It All Together
The right vendor management tools can provide clarity into your operation, help you save on costs, and foster better supplier relationships through effective communication.
Want to learn more? Get in touch with our knowledgeable team through the contact form below.