Vendor/Supplier Management has become increasingly complex. Technological systems and solutions can increase efficiency and reduce some of the “pain” companies experience when trying to manage their hundreds or thousands of mission critical vendors. Check out ICG’s Vendor Management Tools.
The complexity of vendor/supplier relationships increases as the vendor/supplier base grows in size. Vendors/suppliers may provide the business expertise required, but often do not assume responsibility for the risks and compliance violations involving the products or services being offered. Companies without a solution to ensure their vendor’s fulfill required insurance and safety guidelines alongside ever-changing regulations 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 and suppliers are in compliance to regulations and corporate standards from the get go.
A recent study found that almost 60% of companies are dedicating more time on vendor/supplier management than they were just 3 years ago. A Manual or ineffective solution to processing the wide array vendor/supplier documents and data can be a strain on your company’s time and resources. Once again, implementing a vendor portal or supplier portal can help reduce many of the manual tasks associated with vendor management and help you move towards vendor self-service. 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.
A lack of visibility of your vendor/supplier network can lead to a multitude of problems within your organization. Without visibility an operational team may look upon a vendor’s service as satisfactory while the same service is perceived negatively at the executive level. Vendor/supplier visibility has become a strategic priority, being as highly informed as possible is a key component to any data driven decision. 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. Using tools 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.
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 and supplier portals offer a way to stay in 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, and communicate with you when appropriate.
Other pain points related to vendor management and supplier management:
- Quality Control: Ensuring the quality of products or services delivered by vendors or suppliers can be a significant challenge. Quality issues can arise due to a lack of clarity in expectations or insufficient quality control measures.
- Contract Management: Managing contracts with vendors or suppliers can be complex and time-consuming. Contract negotiations, renewal, and ensuring compliance with contract terms require significant effort and attention to detail.
- Risk Management: Vendor/supplier management involves inherent risks, including financial, reputational, compliance and regulatory risks. Assessing and mitigating these risks requires a comprehensive understanding of the vendor/supplier’s business, practices, and compliance history.
ICG Consulting can help you to reduce the pain associated with managing your vendors. Contact ICG today to learn more or to schedule a demo of our configurable vendor management solutions. You can also watch a short video on all of ICG’s back-office solutions.