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Five steps to save money when managing suppliers

Posted by Len Simmons on Oct 31, 2017 10:11:55 AM
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Efficiency, compliance and cost reduction are three of the top business priorities for anyone accountable for managing suppliers.

For any professional taking on the role of overseeing supply chains, managing suppliers and subcontractors is not easy. Sourcing, monitoring, and auditing suppliers can be costly, more so if it isn’t done correctly.

In order to help you reduce the time you spend, and save money managing suppliers, we’ve compiled five steps you can take to a more cost-efficient supplier management strategy.

1 - Cleanse your data

Incorrect supplier information, such as delivery address, account details or key contact details, can lead to unhappy clients and operation failures - these are all consequences of ill-managed data. Sound familiar?

Clean data is key to gaining an accurate 360 view of your suppliers and avoiding costly operational delays. Whether you’re using software or spreadsheets, take the time to ensure that you’re not housing data you don’t need, such as old or dated supplier information.  

 

2 - Build trusting relationships

When it comes to reducing supplier costs, it’s common for managers to instantly focus on how their suppliers can reduce costs for them, instead of looking at how they can improve operations altogether.

A great supplier strategy works two ways. Creating a strong and trusting partnership between your business and your supplier will increase productivity, reduce risk and result in higher success rates for both you and your supplier.  

 

3- Carry out regular and efficient audits

From risk profiling, to ensuring suppliers are qualified and compliant with regulations, carrying out supplier audits can seem like a burden for supply chain professionals. Often, these audits are an afterthought when a supplier is already causing issues, which is more than likely too late to avoid the risks that this can pose on your supply chain.

Audits do not have to be difficult. Take time out to implement a clear audit process that explains how often they need to happen (this could be every quarter, 6 months or annually), and the types of questions you’d need to ask.

Keeping on top of the compliance of your suppliers will ultimately eliminate financially damaging risks, and the time you’d have to spend on firefighting supplier issues as they arise.

4 - Utilise technology

The days of flipping between cluttered spreadsheet after spreadsheet should now be behind us, supplier managers should be making the most of the huge range of supply chain management technology readily available.

Making the investment into technology comes with many benefits, such as better control, transparency, visibility, and protection.

All of these benefits will result in managers having a clearer view of their supplier performance, saving time and reducing the chances compliance failures and nasty fines.

5 - Outsource

Outsourcing is often seen as a more expensive method of managing supply chain compliance, but this isn’t always the case.

Outsourcing aspects of supplier management, sourcing or performance monitoring will not only help free up extra time for supplier managers, but will also equip them with the knowledge and information they need to carry out their jobs efficiently and effectively.

Begin the journey to a more compliant and efficient supply chain

When it comes to eliminating unnecessary costs within your supply chain, mitigating risk and gaining an understanding of your compliance procedure are the first steps to take.

Our free Best Practice Guide can help you on your way to a more reliable and performance-driven supply chain. Download the guide today…

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Download the Modern Day Slavery Report 2017
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