Combating Business Uncertainty Through Vendor Risk Management
The growing number of risks like pandemic and geopolitical conflicts are adversely affecting the global supply chain. Such events are leading to shortages of raw materials, slow transportation, and inability to meet rising demand. Vendor risk management and scenario planning can help you combat business uncertainty in your supply chain. With supply chain resilience at the top of the agenda for most businesses, the way in which businesses interact with suppliers has transformed with supplier-centricity in focus.
Businesses can adopt a supplier experience management system to establish true partnership with their vendors, rather than treating them like commodities. There is a shift from a cost-savings approach to a value-driven, collaborative approach in supply chain and procurement.
What is a Supplier-Centric Approach?
Vendors require nurturing in the similar manner to that of growing relationships with your customers. As disruptive events increase and resources become scarce, good suppliers can have a choice in who they choose to partner with. A supplier-centric approach in procurement planning and supply chain management focuses on supplier engagement and providing best-in-class supplier experience. This approach requires a mindset-shift that will enable you to view your suppliers as an extension of your business. It also involves viewing suppliers as an investment and working together on mutually beneficial goals for your business and your suppliers.
How can Supplier-Centric Approach Help Vendor Risk Management?
Rethinking your vendor risk management strategies and investing in supplier experience can help you build robust supply chains. Here are a few steps you can take to mitigate business uncertaining using a supplier-centric approach.
Manage friction points for an improved supplier experience
You can start your supplier-centricity journey by evaluating your existing interactions with your suppliers and assessing whether your supplier experience is intuitive and effective. This process can assist you in understanding the friction points that your suppliers experience when working with your business. To get started with your supplier experience strategy, you can address these friction points to enable a fruitful partnership with your suppliers.
Streamline communication processes
A common pain point for suppliers across the world is a lack of effective communication due to the use of multiple channels for coordination. Inconsistency in updates between supply chain partners can become troublesome, leading to severe negative effects on supply chain performance. This problem is further exacerbated during periods of uncertainty.
Establishing a digital vendor management system can help your business streamline procurement processes and enable a better relationship with your suppliers.
Enable responsive supplier experience
Handling minute details like late invoice or failure to share information can lead to multiplied impact on supplier experience. Making such activities responsive and considerate for your supplier can go a long way in strengthening your supplier relationships.
As there are many departments involved in a supply chain and the vendors interact with different stakeholders, it is essential to establish interdepartmental dialogue to ensure that there are no discrepancies in communication with your suppliers. Having a dedicated portal for communicating with your suppliers or using a digital vendor management system can help you simplify communication through a unified system.
Embracing continuous improvement
Incremental and continuous improvement measures are needed to guarantee a consistent supplier experience. Prioritizing supplier experience on an ongoing basis when you are planning a vendor risk management strategy can enable your business and vendors to achieve mutual success. In the event of situations like higher demand or immediate order fulfillment requirements, a supplier can accommodate your requests and be willing to go the extra mile for your business if you have a strong supplier relationship. Putting supplier experience first consistently can help you manage such uncertainties and unplanned situations.
A supplier-centric vendor management strategy can ensure better supply chain resiliency and help you mitigate business risks. A mindset-shift to viewing your suppliers as a crucial partnership in your supply chain is needed to build a healthier, more transparent supply chain.
Digital vendor consolidation can make the complete process of managing vendors and ensuring better vendor experiences more seamless and convenient. Not only can you easily conduct vendor risk management through such a platform but also provide a better experience for your suppliers through a unified communication system. A digital vendor management system can also enable you to automate certain processes like sharing invoices, simplifying complex documentation, conducting online payments, and more.
Bizongo’s digital vendor management along with other procurement planning solutions can assist you in every phase of your supply chain and help you build resilient supply chain processes. Contact us to get started with your digital vendor management journey and boost your supply chain operations.