When it comes to the supply chain, technology can make a significant impact. Whether it improves efficiency or reduces costs, there’s no denying the value. The problem, however, is that technology is often under-utilized both internally and externally. While technology can kick internal operations up a notch, it can also strengthen buyer-supplier relationships.
Supplier relations are typically undervalued as buy-side companies fail to see how a balanced relationship with their suppliers can benefit the buying company — it’s a give-and-take type of alliance. Procurement leaders have to establish favorable relationships with their suppliers in order to ensure quality services and efficient processes. And suppliers who trust and respect their buyers are more willing to make the buyer a priority.
Finding the right supplier is the first step to any successful business partnership, but searching manually takes time and increases the chance of overlooking important details. Technology helps simplify the process and quickly identifies the best fit with just a few simple clicks. Once the sell-side is in place, the next step is setting up the appropriate communication channels and payment processes, all of which can be handled through various technology solutions.
Businesses looking to enhance their supplier relations should consider implementing different technologies to advance these four parts of the process:
Finding the right supplier can be a grueling process if the appropriate technologies aren’t in place. E-sourcing tools allow companies to easily compare suppliers, making the selection process more efficient and effective. With e-sourcing solutions, buyers no longer have to rely on the seller’s word or old contracts when choosing their supplier. Instead, all the necessary information is available in one place. This type of platform allows procurement leaders to view suppliers side by side and determine the best fit.
Communication between buyers and suppliers can be both disconnected and sporadic, which leads to unnecessary friction between the two parties. Opening up new channels for correspondence can help establish transparency and prevent miscommunication. Communication platforms that allow buyers and suppliers to communicate in real-time make the transaction process more fluid and efficient.
Technology can optimize and ease the stress of the payment process by tracking invoices and storing payment information. With payment technologies, companies are able to compare prices and charges up front — helping build trust between business partners. Instead of requesting receipts or transaction information, buyers and sellers can check invoices without unnecessary communication.
Trust is the foundation of any successful relationship, but it can be difficult to achieve in a buy-sell relationship when each company has a different set of goals for the partnership. Operational transparencies — like dual-sided pay systems — help alleviate requests and provide real-time information. These automated processes simplify basic tasks, taking pressure off sellers and buyers and creating a window-like channel for both sides. This type of transparency establishes an equal relationship and reduces over-dependence on one side of the deal.
Sourcing, communication, payment processes and operational transparencies between buyers and sellers are in desperate need of an upgrade. Procurement leaders need to rethink their current strategies and consider integrating more technology solutions into their systems. Using technology not only helps improve the efficiency of the procurement process, but also the relationships needed to sustain a successful supply chain.
Paul Noël is SVP of Procurement Solutions at Ivalua.