by Vishal Patel
What’s your Greatest Supply Management Challenge Today?
In May 2022, Ivalua commissioned Forrester to survey over 400 procurement leaders across the globe to ask how they plan to minimize the frequency and impact of supply disruptions.
Stepping out of the shadow of the past few years, procurement leaders are having to rapidly master the art of supply continuity as organizations undergo major changes that demand more agility, innovation, and collaboration to survive.
Our survey + visual spotlight addresses these key supply continuity challenges and how leaders can make the most of the new opportunities.
Supply continuity is a complex challenge, but success is much more likely if you address key obstacles. Through our sponsored Forrester research and experience working with hundreds of the world’s most admired brands, we have established several key strategies to create a more resilient supply chain:
1. Build a Solid Data Foundation
The success of any transparency strategy relies heavily on building a solid data foundation, particularly when it comes to suppliers. For most organizations, data remains fragmented across many systems, with duplicate supplier records and errors, along with no effective way to consolidate internal, supplier-provided, and 3rd party information. This places limitations on the value that procurement generates for your organization and impacts the resilience and agility of the supply chain.
Leading organizations proactively plan their digital transformation around data to gain control over master supplier records, compliment existing data with third-party information, and ensure users have easy access to insights when and where they need them.
2. Ensure 360-Degree Supplier Visibility
The most fundamental element to effective decision making, whether regarding risk or other factors such as performance and cost, is having a complete view of suppliers. You must understand who you are purchasing, or could purchase from, and all relevant details about that supplier. Data will almost certainly come from a variety of sources – the supplier, employees and a range of 3rd party sources. But to be able to save time accessing it and effectively consider all data, you need to have it at user fingertips in one place.
As straightforward as this sounds, it remains a major obstacle for most organizations. Technology is essential, but often creates as many issues as it solves. Point solutions spanning the Source-to-Pay (S2P) process, or suites cobbled together via acquisition or siloed development create new problems, with different information captured in different places and linked to distinct supplier records. Be sure to ensure data is unified across the S2P process and solutions offer native integrations to a robust ecosystem of relevant 3rd party data sources. This ensures you can have a true 360 degree view of each supplier.
3. Map Your Sub-tier Supply Chain
That visibility must be as deep as it is wide. As supply chains have grown longer and more complex, businesses have become increasingly exposed to risks within their suppliers’ supply chains. And while most organizations have at least moderate visibility into their direct suppliers, visibility into the sub-tier remains universally poor. Companies typically struggle as they rely on manual, offline processes to capture and consolidate supplier information to gain a view of the full supply chain. Leading businesses are automating this process. That approach not only saves time, but allows more complete mapping and better assessment of sub-tier suppliers leveraging 3rd party data.
4. Take a Portfolio Approach to Category Risk
Most organizations could do a better job of assessing the risk of their suppliers, particularly through the lens of a category. To minimize the risk of disruptions, leaders are taking a lesson from investors, who have long understood the value of diversification. Category managers should assess the level and types of risk of each supplier within a category selecting two or more suppliers with diverse risk profiles, thereby building in some resilience.
5. Implement Effective, Scalable Supplier Collaboration
The supply chain is the lifeline of companies and the backbone of the business process. But the supply chain is susceptible to various hazards and uncertainty, requiring a level of resilience that depends on effective collaboration and monitoring. Successful supplier strategy anticipates changes in demand and responds quickly.
Ivalua’s Source-to-Pay (S2P) technology provides procurement teams with the tools to capture important information so they can identify potential issues early, initiate collaboration with the necessary parties, and take action to support suppliers and mitigate potential issues.
To become a leader in strategic supplier management and turn your suppliers into a source of competitive advantage, you need to effectively manage the full lifecycle for as many suppliers as possible.
“Procurement and supplier management have become a central part of supporting strategic priorities for organizations – whether it’s helping to mitigate disruption or improving ESG metrics,” adds Alex Saric, CMO at Ivalua. “Effective supplier management will be agile enough to identify disruption and the impact it will have on suppliers and take action. But this can only be achieved by investing in processes and systems that enable organizations to collaborate with suppliers and monitor progress, and gain rich visibility into every aspect of their supply chain.”
Vishal has spent the last 15 years in various roles within the Procurement and Supply Chain technology market. As an industry analyst, he researched and advised organizations in various industries on best and innovative practices, digitization and optimization. He brings a thorough understanding of market trends and digital technologies that can help enterprises be more effective with their Procurement and Supply Chain strategies. He works to ensure that organizations are empowered with technology platforms that enable flexibility, innovation, and agility.
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