If you've just joined procurement, it can be tough to find all the supplier information you need to build strong supplier relationships.
In any new job, you want to hit the ground running. That means getting up to speed with all the information you need on your key relationships. But for new joiners in procurement, supplier data may be tricky to track down. In your average company, records are distributed across all sorts of systems, from filing cabinets to email inboxes. This means the information is disconnected, it's certainly not searchable – and it may only even reside in the head of your predecessor in post. So how can you bring all the rich data you need to build strong supplier relationships into one place? In this blog, we look at the main questions you'll be asking in your new job, and an effortless way of answering them all with Canopy.
Piecing together supplier data is a challenge
For many companies, it's surprisingly difficult to answer the basic questions: who are my suppliers, and what do they do for us? The starting point may well be the ERP, because at least that will show you who you’ve paid money to for goods and services. The problem is that ERP usually provides minimal generic information on an invoice, which is certainly not a high-quality record of what was supplied. Yes, existing payments demonstrate some active suppliers. But key relationships may be with suppliers who only deliver sporadically according to need. To build a richer picture of your supply chain, you're going to have to speak to suppliers. Yet using ERP you're not going to know who’s critical to our business and who you need to call first.
Then you'll want to ask, where is the money going? After all, a key focus for procurement is always to reduce cost, or avoid cost (for instance, by working to prevent price increases). So you'll need better analysis of spending patterns at a more granular level. Of course, there are plenty of spend analytics tools out there, which sit on top of the data from ERP. But they're only as good as the data that’s put in. Problems may include category misclassification, lack of information on disputed invoices, and deficient performance data. (For instance, ERP might not show whether a supplier delivers late).
What's missing in this picture?
Even if you've built up a picture of who your suppliers are, do you know where the contract is? What about any terms and conditions on your contract, or whether there's an NDA in place? For you as the new procurement person, it's vital to know all this stuff. Chances are the contract is sitting in a filing cabinet or on someone's hard drive, and it's unlikely to have been reviewed since the beginning of the relationship. It certainly won't give you an insight into whether the contract was signed informally or thrashed out carefully over a series of weeks.
And then of course, you're going to want to know the rich data. What are the main risks that you face, for instance where is your supply chain weak? Do visitors to company sites have the correct insurance certificates? How does a supplier help you meet our broader business goals such as ESG and diversity targets? What's a supplier's performance been like against contract? Is the preferred supplier list anything more flexible than an Excel spreadsheet or PDF?
Moving from transactional data to building strong supplier relationships
Ultimately, what's missing is the means to turn information about the transactions your company has had with your suppliers into a working relationship with them. You may have flexibility with certain suppliers, or some suppliers might produce particularly high-quality products. And of course, even if you access to the history the email trail of a previous incumbent, you won’t necessarily know their history with the supplier. Establishing this information could allow some easy wins for you, allowing you to build new supplier relationships and make your mark.
All your supplier data, all in one place
For years, sales teams have had a way to pool all the information they need in the form of CRM databases. Canopy is the equivalent, but for procurement teams. The platform's Vendor Master Record feature brings all your supplier data together in one place. Acting as a repository for everything from a signed contract to performance data, Canopy also goes to the source (i.e., the supplier) to check and verify data is correct.
Canopy enriches the data held on ERP and third-party sources using API and bulk data processing. It can assist in everything from finding out about basic company information through Companies House, to using vetting and sanctions organisations to check on a supplier's financial viability. The platform can work alongside a spend analytics tool, giving you an insight into anomalous spending, drilled down to even the lowest level. Data comes into Canopy and is then distributed where it needs to go, not least to the people who manage supplier relationships and partnerships. And that's got to be good news for new joiners in procurement.
To find out more about how the award-winning Canopy supplier management platform helps create a rich supplier data set and helps build strong supplier relationships, contact one of the team today.
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.