As well as allowing procurement teams to add value, improved and effective use of supplier data creates positive feedback loops in supplier management
We know that procurement professionals have a lot in their inboxes. Managing complex supply chains at a time of rising prices and ongoing geopolitical disruption means they're constantly pulled in different directions. So how can they use data more effectively to maximise their abilities? This was a discussion topic at one of our previous Procurement Roundtables. This forum uses expert speakers to facilitate a discussion by experienced procurement professionals on the big topics of the day. In the latest of our blog series summarising the outcomes of these events, we're looking at how to maximise supplier data to enhance agility in procurement. We were joined by procurement industry expert Anna Williams to look at this important theme.
Never underestimate the benefits of effective use of supplier data
Having good supplier data is crucial in allowing Procurement to be agile. It's among the most crucial elements in allowing for adaptation to the organisation’s requirements on risk, quality and spend. Accuracy matters, so it's critical to be able to amend data as it changes. But it's also vital to be able to search data effectively.
A well-maintained Vendor Master Record allows for better, faster, and more informed decisions. The Vendor Master Record protects the organisation and your customers against potential risks and breaches. It also makes it easier for your suppliers to work with you, because is it clear to everyone what is expected.
Community data models have received mixed feedback. Industries with recognised data management standards, such as financial services, saw positive benefits from community models. But on the whole, there is concern that the fees involved can be a deterrent for suppliers.
“Accuracy is everything; a decision made on bad data is worse than no data at all” Nick Verkroost CEO, Canopy (OCG Software)
The challenges to maintaining good supplier data
Collecting supplier data can be a challenge, but there are things that Procurement can do to meet this challenge. Suppliers often express concern that other companies have access to their data. So it's important to educate the supply chain and your own organisation about why the data you are asking for is useful. Adopting a standardised approach allows you to ask the supplier for their information just once. This will improve their understanding of what is required, and why you're asking for the information. You can segment your onboarding process to spare low-risk suppliers from unnecessarily onerous approvals.
It's also important to have a future-proofed data collection model. Traditionally, procurement has relied on “static” data, which is refreshed annually (at best). But ProcureTech can feed you live supplier data that allows you a more dynamic approach. For instance, by linking the supplier record with the ERP, Procurement can put a hold on new POs being raised. That works as a powerful motivator for suppliers to keep their information up to date.
Adding value where it's needed
The years since 2020 have demonstrated that a lot can happen in a short space of time, which has prompted further interest in “live” supplier data systems. These feed up-to-date information into the Vendor Master Record on a regular basis via APIs. This removes the need for painful data cleansing exercises and other manual processes. Technology vendors need to support Procurement to create connected datasets across risk, quality, and spend.
This approach brings benefits to procurement professionals. It allows you the agility to spend more time with suppliers, to build stronger relationships and identify innovations. Ultimately, it makes you easier to work with. You can make well-informed decisions across the supply chain, reducing risk of a catastrophic failure through a lack of data management or oversight. And you can work more smoothly with other business functions within your business too. For instance, by linking the Vendor Master Record with the ERP, Finance is more closely aligned with what Procurement is doing.
“The most important thing for Procurement is making sure we’re easy to do business with” Anna Williams, procurement industry expert
How can you go about introducing a Vendor Master Record into your business?
1. The first question to answer is, what are you trying to achieve from the Vendor Master Record?
2. Identify the most appropriate custodian for the Vendor Master Record. This will differ from business to business, but sensibly sits with a procurement lead.
3. As custodian of the Vendor Master Record, that person can then champion the approach throughout the business and educate everyone it touches. Your business will soon see the benefits.
To find out more about our Procurement Roundtable discussion forum or about Canopy's Vendor Master Record feature as part of its supplier management platform, contact one of the team today.
Visit: www.team-canopy.com
Email: hello@team-canopy.com
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Post by Nick Verkroost
Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.