Points of opportunity you can address for big impact!
Vendor Management has become more complex and with new regulations and the increasingly important role of stable supply chains, this level of complexity will only increase. Technology based systems and process re-engineering can increase efficiency and reduce some of the pain. However, with companies managing thousands or tens of thousands of vendors, many mission critical, it is imperative to have an efficient vendor management program in place.
COMPLIANCE
The complexity of vendor relationships increases as the vendor/supplier base grows in size. Vendors may provide the business expertise required, but often do not assume responsibility for the risks and compliance violations involving the products or services they offer. Companies without a solution to ensure their vendor’s fulfill required insurance and safety guidelines, alongside ever-changing regulations, are in compliance are at a much higher risk of costly fines, penalties and/or lawsuits. Vendor portals or supplier portals can go along way towards assuring compliance by utilizing vendor onboarding or supplier onboarding functionality to insure your vendor are in compliance to regulations and corporate standards before they begin transacting with your company.
TIME
A recent study found that almost 60% of companies are dedicating more time on vendor management than they were just 3 years ago. A manual or ineffective solution to processing the wide array vendor documents and data can be a strain on your company’s time and human resources. Implementing a vendor portal can help you to reduce many of the manual tasks associated with vendor management and help you move towards a vendor self-service model. Vendor on-boarding, online payment inquiry, dispute submission and tracking, and electronic invoice submission are some of the tools that will help you reduce the amount of time your team is spending on vendor management.
VISIBILITY
A lack of visibility of your vendor network can also lead to a multitude of problems within your organization. Without visibility into vendor performance and financial health your team may look upon a vendor’s service as satisfactory while the same service is perceived negatively at the executive level. Vendor and supplier visibility has become a strategic priority, being as highly informed as possible is a key component to any data driven decision and vendor management program. A study by LNS Research, found that manufacturers with poor visibility into supplier performance had a supplier defect rate more than double that of it’s competitors with more visibility. Utilizing solutions like AP automation, workflow, vendor portals, supplier portals, vendor onboarding (supplier onboarding) and maintenance, score-carding, dashboards, and data mining are ways to effectively evaluate your suppliers performance.
COMMUNICATION
A recent study found that nearly 70% of companies have reported problems in communicating with their vendors which negatively impacted relationships with their downstream customers. Vendor portals offer a vehicle to maintain a constant communication with your vendors. Because vendor portals are accessible 24×7 from anywhere in the world, your vendors will always be able to get information, send data, subit payment disputes, and communicate with you when appropriate.
ICG Consulting can help you to reduce the pain associated with managing your vendors. Check out ICG’s comprehensive suite of Vendor Management Tools that can help you achieve your vendor management goals. Contact ICG today to learn more or to see a demo of our vendor management solutions.