Procurement professionals are always looking for the “perfect” supplier. The one that is going to communicate effectively, provide insightful performance metrics, and offer the best deals. But all of this is not possible without clear trust and transparency – a formidable challenge faced by procurement teams today.
Because deals are often renegotiated and inventory levels are always changing, supplier data can come through in vast amounts. Unfortunately, not all this data is accurate and there can be some errors. This creates the need for procurement to proactively monitor their supplier’s information, as untrustworthy supplier data can have repercussions across your entire organization. You run the risk of:
- Pivoting deal strategies based on incorrect assumptions
- Lacking a clear picture of deal performance
- Inventory issues
- Poor trading relationships
- Reducing job satisfaction for your team due to the frustrations of manual tasks
- Being hesitant to share important insights across the team
These risks are why procurement needs to ask the following questions when deciding whether to trust their supplier data.
Are they using error-prone spreadsheets?
As you probably already know all too well, spreadsheets are very prone to human error. As the number of trading partners grows, so does the complexity of the spreadsheets and the amount of them used. Organizations have information saved in multiple places and it’s hard to know which spreadsheet is the most up to date. If the wrong data is entered, then outputs and reports generated from that data will also be incorrect. Data that is left disconnected and in its own organizational silo is a large cause of supplier data distrust. Without getting accurate, meaningful insights into your deals, procurement cannot minimize risks and maximize opportunities with suppliers to attain profitable growth.
Are they showing you real-time data?
Reliable, useful, and real-time supplier data during the buying process is an essential element to help procurement make successful buying decisions. If information is provided down to the minute, you have actionable information that allows you to better negotiate with suppliers. However, if the supplier data is not relevant or in real-time, disputes and misunderstandings can arise which means procurement could be missing out on massive opportunities.
Do you have transparent access to the data?
Transparency is key to a robust procurement strategy, not just to the end result but to the whole process. Having consistent access to your supplier data is critical to achieving trust. This ability to maintain a transparent pathway to your data allows you to ensure its authenticity and quality every day. If a supplier is unwilling to share data, procurement is left asking, “What is the supplier trying to hide?”.
Are your supplier’s inventory levels correct?
According to this State of Supply Chain Visibility report, 92% of companies claim they cannot trust the data they have on products traveling through their supply chains. Your inventory is key to tracking what stock is available and ready to sell. It shows how many items are on the shelf and when they can be dispatched. However, when a supplier discontinues a product, recalls it, or makes it obsolete, how do you know? If that information isn’t communicated, then you may continue to base deals around products that aren’t even available.
Procurement teams facing challenges with suppliers regarding inventory levels and stock replenishment can end up with shortages, supply disruptions, or unnecessarily high levels of inventory – all of which can risk customer satisfaction. With strong supplier data and accountability, all trading partners can respond more effectively and work together to make the best deals possible.
Do you both have a different understanding of the agreement in place?
In a perfect world, procurement would make the deal with the supplier and it would be all smooth sailing from there onwards. But this doesn’t always happen. Trading partners can become overwhelmed and can’t make sense of the data and the complexity of their deals. The agreement that is in place becomes useless if neither party can understand it. Without alignment and trust, savings fail to materialize, supplier performance can slip, and risk rapidly increases.
Build trust with your suppliers with the help of Enable
Data is the currency of the future – it underpins every decision procurement makes so they can determine which goods are available, source the right suppliers, and know the right price to pay. To close the data trust gap with suppliers, procurement needs to focus on how data is collected, stored, and analyzed. A supply chain powered by timely and accurate supplier data improves operations and minimizes the chances of disruption and quality issues.
It’s time for procurement to begin taking the steps necessary to build trust with their suppliers. This can be done with a collaborative, cloud-based rebate management platform that brings all your suppliers together onto one platform, giving clear visibility into their data.