Buyer and supplier relationships involve a significant amount of interaction, right from the start of the relationship through ongoing purchase and payment activity. Both parties require key information about the other and much of that information is constantly changing. Paper-based transactions are inefficient and prone to error.
‘Supplier on-boarding’ refers to the process whereby a company’s suppliers are equipped with the necessary knowledge to become a part of a company’s supply chain. This process can be made easy and pain-free when using a supplier management solution paired with an online supplier portal for effective supplier collaboration. An online supplier portal can lead to more ‘spend under management’ (generally understood as the percentage of spend that is under some form of management by Procurement) and fewer productivity setbacks, such as manual data entry and blocked invoices.
In order to achieve successful supplier collaboration, an organisation’s suppliers must be willing to actively use a portal. Through making suppliers aware that the investment to use a portal on their part is minimal, with a high return, they will be more likely to participate. Not only do suppliers benefit from increased repeat sales, but also from improved invoice payment times.
Here are 8 reasons why your organisation should consider a dynamic purchasing system that enables online access to your suppliers via a portal:
- Dramatic efficiency savings – a cloud-based supplier portal streamlines supplier communication, removing the time consuming manual interactions that take place. The portal is a hub for electronic trading and communications with your suppliers via invoice file uploads, online invoice entry and self-service supplier account status enquiry.
- Lower lead times – the time and cost associated with invoice processing is reduced by eliminating the need to manually register the majority of incoming invoices. Furthermore, less time is spent answering status request calls and emails.
- Accuracy – a higher level of accuracy can be achieved through supplier self-service and supplier performance monitoring.
- Repeatability – repeatable sourcing processes and reviews can be set up through automation, such as automatic reminders of supplier review activity.
- Better user experience – purchase order posting through a portal provides a convenient alternative for suppliers to receive orders. Furthermore, self-service management enables suppliers to directly maintain their standard information and state the goods and services they sell in a clear and normalised format. This information can be downloaded to an organisation’s purchasing system, or made available as punch-in from any system so enabled.
- Depth of evaluations – online supplier reviews can be carried out with auto scoring for ongoing supplier intelligence.
- Compliance - a portal provides near real time visibility into the performance of your supplier community, making all transaction activity easily accessible in order to monitor and drive compliance.
- Risk mitigation – organisations can monitor supplier performance and risk more easily. Buyers obtain a snapshot of the current status of supplier performance, including rating factors such as delivery, quality etc. Buyers also obtain a risk classification and a view of the supplier’s strategic importance to the organisation.
A solution such as PROACTIS Supplier Management provides an online portal for organisations to effectively manage their supplier collaboration for substantial business benefits. Organisations using the supplier portal can look to achieve a ROI in less than six months. For further information, contact us on +44 203 866 8800, or download the Supplier Management ‘Jump-Start’ guide: