eSourcing software: keeping a tight rein on your supply chain
- 20 Aug 2015
- Best Practice & Strategies
Alun Morris, Sourcing expert at Medius, looks at how eSourcing software can be used for more than identifying and evaluating new suppliers to get ‘best price’. In this article he looks at how it can help improve visibility of your supply chain as it grows….
As your business grows, inevitably your supply chain will grow too. At first, you may just rely on a handful suppliers you know well, but once your business takes off and you need to cast your net wider to identify suppliers more aligned to the needs of your business, suddenly you have a supply chain that needs identifying, managing and looking after.
Your supply chain will become essential to the success of your business and will impact on most areas of it, for example, forecasting customer demand, sourcing of materials, manufacturing and distribution. Managing a supply chain and safeguarding your business from risk can be a complex challenge, especially when you’re faced with changing demands from your customers and the market you operate in.
"The global marketplace has changed and today, thanks to the Internet and global transportation links, there are now few barriers to suppliers selling their goods and services worldwide. And with intense pressure on businesses to minimize costs, often working with overseas suppliers can be far more cost-effective".
Alun Morris, Sourcing Specialist, Medius
As a result, many businesses today are reliant on global and multi-tiered supply chains. Yet their complexities bring about fresh challenges for businesses as the increased risk posed by an expanding list of distant suppliers intensifies. And it’s not just your direct suppliers that pose a threat, what about the supplier’s own network of suppliers, and even their suppliers? Rapidly shifting commodity pricing and supply, geo-political factors and ‘black swans’ create a landscape where one minor event has the potential to rock the entire supply chain and business.
If it’s possible that your supply chain could operate at this level of complexity in the future, you must have full visibility of suppliers at all in times in order to minimize these risks. eSourcing software can help with this as it allows buyers and suppliers to engage with each other in aspects of the procurement process in a structured format, thereby providing a much clearer view of what is happening. The ability to see what’s going on and study patterns or incidents in real time allows businesses to plan for or proactively address a problem before it becomes a major issue. It also allows benefits to be rapidly accrued if economic factors move one way or another (for example, currency, oil, shipping rates and so on).
"Vetting new and existing suppliers and ensuring they meet strict assessment guidelines can be a necessary but time consuming process. Automating this process using eSourcing can speed it up and improve supply chain visibility by effectively managing relationships all within a central online portal".
Alun Morris, Sourcing Specialist, Medius
eSourcing also enables businesses to evaluate their suppliers according to strict assessment from the outset, helping to ensure best practice from the selection stage. Assessment criteria can include supplier ethics, delivery track record, quality of products or services and sustainability. For the supply chain manager, it provides a detailed view of prospective and current suppliers and gives an organisation the compliance and control that is often needed when managing a large number of suppliers and a large amount of data that can often be fast moving and complex.
The key benefit of eSourcing is its ability to standardize process and capture data on suppliers. This data can then be analyzed to flag issues rather than being reactive. Don’t lose sight or control of your supply chain before it is too late; clearer visibility is the key to helping keep a more informed and effective rein on your suppliers.
In the Press: Business Advice