The Benefits Of Supplier Performance Management Using Source-Topay Solutions
SUPPLIER PERFORMANCE MANAGEMENT SYSTEM
It is given that sourcing goods and services can be complex process that often has multiple stakeholders and numerous challenges associated with it. For in-house procurement departments, key factor in driving improved efficiency and cost savings is the ability to manage suppliers in more structured and effective manner. The introduction of supplier performance management (SPM) can, in many cases, be the key to unlocking better and optimised solutions, creating value and process improvements.
Sourcing solutions or Source-to-Pay (S2P) solutions provide centralised platform for the management of procurement activities. This can include purchase order creation and tracking, complete inventory management, and SPM. S2P seamlessly enables the capture of supplier performance data and the creation of relevant KPI?s, while optimising the procurement process as whole.
Successful SPM solutions add value to the customer and supplier experience and with the right system in place, an organisation can better manage their suppliers, improve delivery and reduce costs. In this article, we will discuss the key benefits of using S2P solutions for supplier performance management.
Controlling Supplier Performance
The introduction of supplier performance management into S2P solutions provides significant value. It offers the ability to create structured and uniform platform to evaluate and measure the performance of suppliers. In addition, real-time tracking and analysis of data can provide clear overview of supplier performance. This creates awareness of any issues which can then be addressed, leading to supplier improvement and, ultimately, to better customer experience.
The capabilities of S2P solutions enable organisations to reduce labour costs by automating processes such as supplier scorecard management, contracts and PO history, supplier KPI?s, and supplier performance reporting. Thus, organisations are able to manage suppliers more efficiently and gain greater control over supplier performance.
Streamlining Sourcing
A further benefit of supplier performance management within S2P solutions is that it provides direct access to supplier data, allowing organisations to develop their portfolios of preferred suppliers. Enterprises can source preferred suppliers via different methods, including quality evaluations, performance metrics, cost savings, and supplier certifications. This information can then be used to create reports and compare results, enabling organisations to better select suppliers and focus on the ones that meet their company criteria.
S2P systems provide users with clear visualisation of the current state of the sourcing process. The system can also be used to automate application assessment, eliminate duplicate entry, reduce paperwork, and speed up decision making by executives.
Real-Time Reporting and Insight
In addition to providing visibility of suppliers, S2P?s supplier performance management capabilities also provide real-time access to performance indicators. This helps organisations to monitor key supplier performance metrics, such as costs, lead times, and delivery quality.
By tracking these indicators in real-time, an organisation can effectively manage their suppliers and identify areas where improvement is required. The data gathered can also provide insights that can be used to better understand trends and/or forecast potential performance concerns.
Ultimately, S2P solutions aim to provide comprehensive supplier performance management solution. This allows organisations to take control of their supplier networks, improve supplier relationships and collaboration, and achieve relationships of trust and cost savings in the long term. S2P?s automated reporting capabilities gives organisations the ability to record and monitor supplier performance data and configure reports that deliver real-time insights that can be explored and managed. This increases transparency and accuracy, resulting in improved supplier performance management, cost savings, and faster times to market.
