Small and Medium Enterprises play an important role in the european economy. SMEs represent more than 90% of all european companies, creating most of the jobs and being the innovation motor of the EU. A central aspect of any productive company is the importance of suppliers management. Too often, purchasing and quality departments are not aware of the value of a good supplier relationship. Nevertheless, a good supplier is fundamental for a high quality product, transparent production and an efficient supply chain management.
SMEs are highly dependent on the collaboration of their suppliers and should take their business partner seriously and talk to them at eye level. Even if some SMEs know that they should invest more in their supplier management, finding where to start is another problem. Established softwares and tools are tailored for bigger companies and generally too complex and expensive for smaller companies. In the meanwhile, a paper chaos often reigns in their documents management bringing low transparency and difficult information processing.
Among the current problems challenging purchasing and quality management departments often figure:
- Data and communication are not centrally and supplier specific archived
- No central access is available for all involved parties
- Colleagues are not always aware of the latest status
- Few established process structures
- No specialised employees
- Short-term relationship and plans -> no strategic supplier selection
- Few IT infrastructure and/or no IT department
- No controlling procedure implemented
On top of all those problems and challenges lies the management cost for heavy and necessary documentation such as product and supplier related documents. Furthermore, suppliers data and performances are generally not reported and analyzed since neither systematic evaluation nor central complaints management are done. Those insufficiencies can lead to a less qualitative product or service and generate higher process costs and a huge waste of time.
All those troubles can be avoided with an efficient Supplier Relationship Management. The supplier relationships can be optimised for the long-term to bring a significative reduction in process costs and acquisition price. A transparent documentation of all tasks, evaluation and measures will increase a process quality.
For an efficient Supplier Relationship Management, it is important to:
- Collect centrally the whole communication
- Bring the suppliers to work pro-actively
- Manage centrally all contracts
- Collect centrally all documents and data per supplier
- Create suppliers profiles
- Develop supplier evaluation through:
- Complaints management
- Audit follow-up
- Suppliers evaluation
The more transparent and up-to-date all data and documents will be, the easier it will be for quality management and purchasing teams to work efficiently. The data can serve as work basis for the purchasing team and the next quartal negociation while quality management can use it for audits preparation and further evaluations.
It is especially important for all parties to have access to all important data information and documents. Only then can an efficient supplier management be reached.
ecratum is a web-based app offering a supplier management tool for SMEs. Collect easily all suppliers and product related documents and centrally manage all the data on our platform. Register now for a free online-demonstration and learn more about ecratum and efficient supplier management.