Understanding Your Suppliers from Below the Surface

One of our new papers for this year comes courtesy of supplier information management firm HICX and our ex-MD Peter Smith. You may remember the popular breakfast briefing with the firm last year which discussed AI and procurement, and the impact of master data. This paper complements that: it is titled, “Understand Your Suppliers – Do You Know What's Happening Below the Surface?  It's about what you really need to know and why.

We hope the following extract will pique your interest.

What Information Do We Need?

Over the years, we can see that organisations have gradually needed more and more information about their suppliers. We can classify that in terms of the purpose behind the information.

Basic business information

If we look at the different stages of the procurement cycle, we can identify the basic information that is needed to enable us to transact business at each point. So, for instance, when we first go out and look for suppliers to meet a need, we need the basics about what they do and what they can supply.

Pretty soon, if we want to take it further, we need basic contact details; we need to know who to talk to in the organisation and understand their roles. And if we take it to the next level and want to engage more closely, perhaps get a quote or more information from them, we will start needing some validation that they are genuine, they are who they say they are, and so on. We might want to check they have certain accreditations, capabilities or experience.

At the point at which the decision is made to trade with them, we get into what is often called supplier onboarding.  Now we need to know more, including the details that are required to pay them - their bank account details and so on. There may well be a contract to agree, of course.

Performance

Then once these firms are in place as suppliers, it is likely that information and data will be required to support performance management. That might be production and output information, or it could be information linked to KPIs, customer satisfaction or service-level information. If goods are supplied, there may well be delivery-related data, quality information from the supplier or our own checks that generate more data.

Contract compliance data may also come into the picture, or progress reports in the case of a major IT or construction project. For more strategic suppliers, engaged in supplier relationship management (SRM) schemes perhaps, we may want information about the progress of joint projects or innovation initiatives.

Risk management

Risk issues today run through the whole procurement and supply chain process, as risk links to every step of the journey with suppliers. Some are regulation-driven, as explained in the following section. Some might centre on getting hard factual intelligence about the supplier’s financial situation, to assess whether there is risk of bankruptcy or similar. Issues might be related to whether their factory in Thailand is likely to be subject to flooding.  But increasingly we want to know more about their business approach and beliefs as well as the hard facts.

Download the paper here, free on registration, to read more.

There is a second chance to attend the breakfast we mentioned -it takes place March 14th, Searcys at the Gherkin (London) – 8.00-8.30am registration, to finish at 11am - Read more about that here. 

 

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