What is Supplier Network Management?- Definition

Supply network management refers to managing the movement of material and information. Connecting organizations execute this together to serve the end-consumer effectively and efficiently. Supply network management aims to lead a smooth process and not face any kind of obstacle.

Understanding Supplier Network Management

Companies relying on suppliers to get the best quality products at a minimum cost is challenging. It is an even more significant challenge to be ready with a quote itself (in the first place), as we work in a more demanding society. Finding the right supplier who can be trusted has become like a treasure hunt game. Some companies spend half of their time and money and undergo various processes to find the right supplier to get the best possible deal. Supplier Networks have thus become essential to compete in today’s business environment.

Research conducted by the Aberdeen Group has found that companies using Supplier Networks can increase spending under management while reducing costs related to poor supplier performance.

A Supplier Network is a common, virtual platform where suppliers and buyers can collaborate and do business together from any part of the globe. It helps discover suitable opportunities for buyers and speeds up the procurement cycle, resulting in timely selection of goods, delivery, and payment. Besides this, it reduces errors, paperwork, and delays. In addition, supplier Networks give buyers plenty of options to select suppliers according to their preference and convenience, thus reducing cost and increasing profits.

Benefits of Supplier Network Management for Suppliers and Buyers

Automated processes reducing manual efforts

Automation of data entry, data processing, and data transfer between suppliers and buyers limits manual effort. This reduces processing time and smooths the flow of information between both parties.

Catalog Management

Supplier Network helps suppliers upload different catalogs for different sets of customers. Variables include future pricing, item specifications, special offers, etc., to avoid confusion.

Simplified Sourcing Process

The sourcing process is simple when suppliers and buyers respond to sourcing events on an interactive forum. For example, viewing the event scores through a supplier network is helpful.

E-Invoicing and Reduction in Paper Flows

E-invoicing is an advantage to Supplier Network. The procurement team cross-checks the items ordered after delivery to process the invoice. Then the invoice is sent to the finance team for payment. This way, there is a reduction in errors and delays due to paper flows.

Contract Management

Supplier Network Management enables both parties to be aware of their commitments and expectations at all times by keeping a close watch on their contract terms. This reduces contract violations, which result from miscommunication or missing essential clauses of the contract.

Reduction in Purchasing Cycle Times

It helps build confidence amongst each party due to the smooth flow of information, resulting in the timely processing of orders, delivery, invoice, and payments. Thus, this enables them to reduce the purchasing cycle time.

Up-to-date Supplier Information

Information on suppliers should be updated with the latest news. For example, Supplier Network integrates with supplier management software solutions and enables the onboarding of potential suppliers.

More Visibility and Better Relationships

Since both parties need to collaborate, Supplier Network Management gives them clear visibility of order, invoice, and payment status. This visibility helps both parties trust each other and build a stronger relationship.

Enhanced Supplier Performance Management

Supplier Network Management enables suppliers to monitor their performance and development reports. Through the performance report and development card, suppliers improve their pain areas.

In conclusion, Supplier Network Management is an asset to companies to improve a supplier-buyer relationship, thus converting cost to profits.

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