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CQ Supplier Management

Supplier Management


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CQ Supplier Management

What is Supplier Management & How Does it Drive Operational Excellence

HELPS IMPROVE THE ENTIRE SUPPLIER QUALIFICATION PROCESS AS WELL AS THE OVERALL QUALITY CULTURE OF THE SUPPLIER

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Globalization has enabled businesses to source their raw materials and other inputs from anywhere in the world. At times, even the final product is outsourced with only the brand name differentiating it from the other products in the market. Despite that, the final onus of the quality of the product lies with the brand that is outsourcing. Therefore, it is very essential to understand the capabilities of the suppliers and whether they too match the regulatory needs of the product in question.

This is not just a simple exchange of certifications but a matter of great significance where the original manufacturer has to be sure that not only does the product match the quality needs but the processes as well. But with multiple suppliers and located in different parts of the globe, physically checking the veracity of the supplier’s claims of compliance is just not possible. Automating the process not only makes it simpler but is also recommended by the regulatory authorities such as ISO 9001 and Food and Drug Administration. Supplier Management Software can help improve the entire supplier qualification process as well as the overall quality culture of the supplier.

What is Supplier Management?

The end-to-end management of your relationship with third-party vendors, right from the time of onboarding to ensure their performance and successful management of the relationship for mutual benefit can be defined as supplier management.

Suppliers form a critical part of your manufacturing process by supplying vital inputs. When you have multiple suppliers, keeping track of their capabilities and the value they add to your organization can become difficult. As your business grows, your understanding of your suppliers also becomes that much more critical as they need to keep pace and supply on time the quality and quantity that you need. A framework of policies that helps you manage your supplier relationships to ensure they understand and meet your requirements is supplier management.

Enabling you in this process is the Supplier Management Software, a comprehensive solution for automating your supplier engagement lifecycle, right from assessing, qualifying, onboarding, interacting, and collaborating with suppliers to measuring and monitoring performance, escalating and, when required, off-boarding suppliers effectively. Risk assessment, preventing a recurrence of any incidence to recording nonconformances, implementing corrective/preventive actions, and tracking their results are all made easy through automation and integration of the processes involved.

With ComplianceQuest’s Supplier Management Solution, you can:

  • Manage risks, eliminate variance and ensure regulatory compliance
  • Record findings and initiate the SCAR process
  • Ensure rapid business growth with improved business efficiency and customer satisfaction
  • Manage temporary supplier deviations for received goods, helping reduce data errors
 
Process Involved in Supplier Management

The Process Involved in Supplier Management

The Supplier Management process starts with defining what the “expected outcome” should be, called the “Success Criteria”. The success criteria is defined by identifying the risks and the role of the parties concerned in mitigating those risks. On clearly defining the success criteria, a business can identify its supplier needs include:

  • 1
    The number of suppliers it needs
  • 2
    Geographic location
  • 3
    Technical and logistical capabilities
  • 4
    Industry focus
  • 5
    Size and depth of operations
  • 6
    Financial strength
  • 7
    Delivery and cycle times
  • 8
    Technology framework
  • 9
    Customer service standards
  • 10
    Quality and compliance requirements

This makes the qualification and onboarding process easier. Missing this critical step can lead to poor supplier relationships, delayed shipments, missing technical skills, etc. This can affect the quality of the products and consequent brand erosion.

Based on the Success Criteria, a typical qualification and on-boarding process would involve:

  • Converting the Success Criteria into formal requirements and developing the qualifying steps
  • Researching and shortlisting candidates
  • Vendor assessments
  • Selection/initiation of onboarding
  • On-board/periodic requalification

Types of Supplier Relationship

Supplier relationship is a broad term. In reality, a business has different kinds of interactions and engagement with different suppliers based on several factors such as the product and services suppliers, the stage of the supplier lifecycle they are in, and so on. Typically, these five types of relationships

 

  • Purely Transactional
    Purely Transactional: This is the most common, straightforward engagement with focus on contractual fulfilment based on the requirement.
  • Preferred Partner
    Preferred Partner: Some suppliers are preferred over others with a deeper understanding between the two with greater engagement.
  • Long-Term Relationship
    Long-Term Relationship: There is greater trust and increased sharing of information and commercial goals with such partners that are bound by a longer-term contract.
  • Strategic Alliance
    Strategic Alliance: This is characterized by an exclusive arrangement with commercial objectives and targets for greater collaboration and incentivized for mutual benefit.
  • Backward Integration
    Backward Integration: The supplier is owned by the business, resulting in a unified culture with complete sharing of information and plans.

What are the Benefits and Challenges of Supplier Management?

Whatever the engagement level, businesses need to be able to communicate their requirements clearly to their suppliers, be assured of the quality of the materials and inputs received, assess performance, improve and so on.

A supplier management system enables this and ensures:

  • ISO 9001
    Business continuity, efficiency, visibility and flexibility
  • ISO 9001
    Reduced inventory costs and improved purchasing behavior
  • ISO 9001
    Supplier compliance with various internal and external regulatory requirements
  • ISO 9001
    Streamlined quality processes and supplier selection
  • ISO 9001
    Enhanced collaboration and improved communication with the suppliers

The challenges of supplier management system are as follows:

  • ISO 9001
    With an increase in the number of global suppliers businesses have to work with, getting to know their suppliers, their performance measurements and resulting risks that require attention are among the many challenges that SCM leaders are facing.
  • ISO 9001
    Improve the visibility to sales forecast to allow supply chain to ramp-up and ramp-down in a timely fashion to contain costs
  • ISO 9001
    Reduce supply chain turn-over
  • ISO 9001
    Increase product and process quality to meet the growing customer demands
  • ISO 9001
    Reduce significant friction between supply chain and internal parties caused by rapid changes to the product design, manufacturing, delivery schedules and quantities

 

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What are the Benefits and Challenges of Supplier Management?

Whatever the engagement level, businesses need to be able to communicate their requirements clearly to their suppliers, be assured of the quality of the materials and inputs received, assess performance, improve and so on.

A supplier management system enables this and ensures:

  • Business continuity, efficiency, visibility and flexibility
  • Reduced inventory costs and improved purchasing behavior
  • Supplier compliance with various internal and external regulatory requirements
  • Streamlined quality processes and supplier selection
  • Enhanced collaboration and improved communication with the suppliers

The challenges of supplier management system are as follows:

  • With an increase in the number of global suppliers businesses have to work with, getting to know their suppliers, their performance measurements and resulting risks that require attention are among the many challenges that SCM leaders are facing.
  • Improve the visibility to sales forecast to allow supply chain to ramp-up and ramp-down in a timely fashion to contain costs
  • Reduce supply chain turn-over
  • Increase product and process quality to meet the growing customer demands
  • Reduce significant friction between supply chain and internal parties caused by rapid changes to the product design, manufacturing, delivery schedules and quantities

 

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What is the Need for Supplier Management?

Supplier management enables transforming how you work with your suppliers by integrating a collaborative system into your operations. The ComplianceQuest Supplier Management Software is a secure, cloud-based solution that fosters best practices in supplier relationships, ensuring quality, compliance and readiness.

Blending with audit, risk, change, document management and other QMS capabilities, information is easily and instantaneously shared with the suppliers, making it straightforward to address issues, take corrective actions and stay ahead with real-time performance monitoring driving efficiency and cost-effectiveness.

What are the Strategies to Improve Supplier Management?

Today, organizations adopt procurement operations to reduce their production costs. A large number of organizations experience the need for building positive relationships with the suppliers. Supplier Relationship Management is a crucial aspect of the modern procurement function.

Strategies to Improve Supplier Management

Strategies to Improve Supplier Management

The strategies for effective supplier management are listed as follows:

  • understanding the interests of suppliers
  • collaborating with suppliers
  • aligning suppliers to client requirements
  • aligning suppliers to the strategic plan of businesses
  • helping suppliers enhance their performance
  • sharing knowledge and information
  • integrating with updated technologies
  • leveraging the capability of suppliers

What is Supplier Lifecycle Management?

Supplier Lifecycle Management (SLM) is an end-to-end approach where the purpose is to stay on top of all elements of the supplier management processes, identifying issues as they arise, managing approvals and changes in real-time, and ensuring appropriate supplier performance and quality standards through consistent audits and reviews.

Supplier lifecycle management has seven unique phases as discussed below:

  • Identify, assess, qualify suppliers
  • Maintain approved supplier list
  • Onboard new suppliers
  • Inspect materials
  • Manage supplier quality
  • Audit, monitor supplier performance
  • Manage supplier communications or relationships

 

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Frequently Asked Questions

What is ‘Supplier Management’?
Supplier management refers to the holistic management of suppliers, from identifying to onboarding, integrating them with your processes and continuous improvement for mutual growth.
What are some of the critical steps involved in the supplier management process?
For successful supplier management, you need to define the success criteria based on which you define the criteria for identifying, onboarding, training, evaluating and offboarding, if necessary, your suppliers.
What is Supplier Information Management?

Supplier Information Management allows an enterprise to collect a rich set of supplier data, validate and manage services across an entire organization ensuring supplier compliance with government legislation, industry standards and company requirements. It gives a 360° view of updated supplier information and helps to protect brand value and reputation.

What are the advantages of a supplier management program?
With a good supplier management process, you can ensure a reliable supply chain, lower costs, improve risk management and drive innovation.
The ComplianceQuest Supplier Management Software is a module of its cloud-based, scalable and robust quality management system built on the Salesforce.com platform. It integrates well with the organization’s existing systems such as the ERP and CRM software to provide a unified view of the enterprise-wide data. It also automates the entire supply chain workflow, thereby triggering the next course of action in case of any incidents or problems. It encourages a culture of quality not only within the enterprise but along its entire supply chain.
What is Supplier Relationship Management?
Supplier Relationship Management is a step by step process that defines how a company interacts with their suppliers. Three fundamental aspects of Supplier Relationship Management are collaboration, integration and trust, regardless of the type of relationship between a business and its suppliers. Supplier Relationship Management presents a structured way for businesses and suppliers to enhance their relationships, increase profitability, and deliver improved products and services to their customers.

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