Business process automation is a common theme for organisations – and its benefits are as applicable to supplier management processes as any other function. Embracing technology as you move towards digital transformation has numerous benefits and huge potential to enhance the efficiency and effectiveness of your supplier relationships. Here are a few of the reasons why you should automate your supplier management processes…
Suppliers take responsibility for their own data
Collating, updating and maintaining accurate supplier information is time-consuming and repetitive, and also needs regular checking and remedial work. Rather than dedicating your own human resources to this task, it makes much more sense to automate it via a supplier portal and pass the responsibility for master data management on to your suppliers, who have a constant 360-view of any changes. Keeping you in the loop on their data via the portal can form part of their KPIs, meaning that they’re incentivised to keep it fully up to date.
The margin for error decreases
As you automate your supplier management processes, you decrease the chance of errors creeping in through the manual input of paperwork. If you allow your suppliers to input their own data, they can immediately correct any mistakes before saving their information to the system.
You can strengthen supplier relationships
The more smoothly the administrative aspect of your relationship is running, the more you can focus on developing a strategic partnership, rather than one based on correcting errors and chasing up information. Here, automation delivers the opportunity for a more positive approach to building lasting working partnerships.
Supplier Lifecycle Management (SLM) gets easier
Supplier process automation makes it much easier to manage your suppliers, providing a structure for everything from selection to onboarding, performance evaluation and ongoing relationship management.
Supplier analysis becomes straightforward
Setting and tracking KPIs through an automated process gives you instant visibility when there are blips in supplier performance. This improved transparency helps you to both react to major issues in real time and assess whether any regular patterns are emerging that should be discussed and addressed.
Suppliers’ data is correctly stored
In line with the increased need for best practice data handling following the introduction of GDPR in 2018, supplier process automation can eliminate the unsystematic collation of supplier data using the ubiquitous spreadsheet. Spreadsheet data is not only vulnerable to data breaches, but difficult to manage in terms of accuracy. Reliance on spreadsheets means that potentially vital missing information can be easily overlooked. Using a system based on automating processes – such as a supplier portal – you can ensure that all the necessary fields are complete before a supplier is accepted. Moreover, you can eliminate the need for physical storage of paperwork, which not only takes up space unnecessarily but is potentially insecure.
Enforcing ethical trading standards
Automating your supplier management processes will help you to manage reputational risk. Tracking suppliers’ compliance with ethical trading standards can be time-consuming and difficult to police without the use of automation. To demonstrate that your supply chain is sound from a CSR perspective involves a number of factors, which the Ethical Trading Initiative (ETI) pulls together. For your own protection, suppliers should be able to show that they meet the following principles:
- Freely choose employment
- Respect the right to collective bargaining and freedom of association
- Safe and hygienic working conditions
- Not to use child labour
- Pay living wages
- No excessive working hours
- No discrimination
- Provision of regular employment
- No inhumane or harsh treatment
You can read more about the ETI Base Code, an internationally recognised code of labour practice, here.
Finding a software solution with a dashboard that gives you full visibility of supplier management will help you to identify problems immediately, centralising your processes. It’s possible to go even further and integrate your supplier system, with SAP, for example, which is another step towards introducing robotisation of the entire supply chain. Once you reach this point, you can fully remove the silos between all of your supply chain processes to develop seamless workflows.
While you might not be quite ready for a fully digitised supply chain, using automated processes to manage your suppliers will set you on the right path, delivering tangible benefits and freeing up resources.