Overcoming key challenges in Supplier Information

Management
“Let our advance worrying become advance thinking and planning.”
Winston Churchill

Churchill’s words speak in terms of recognizing potential kinks and challenges one can face in Supplier
Information Management before they occur. Though there are several key challenges in the system, we
can turn that worry into advance planning as a means to overcome the challenges put forth. Prevention
is better than cure, and planning can take us there.
Implementing a strong and robust Supplier Information Management (SIM) solution provides efficient
data collection, data management and validation services across the organization. SIM provides
governance and management of massive volumes of data from suppliers spread across numerous sources.
It is not limited to a certain subset of data but it does include all the relevant documentation and data
that a company generally needs to increase and optimize transactions and interactions with suppliers.

The advantages of a secure Supplier Information Management system:

1. Supplier Information Management ensures that there is strong governance of supplier data
2. It enforces international and global standards of governance of supplier data
3. SIM enforces international standards for allowing increased local flexibility
4. It allows users to adequately manage supplier information by exception
5. It ensures that there is a higher level of productivity and accuracy with regard to the supplier
information
6. It generates supplier information which is actionable in nature

To make the most of Supplier Information Management, the challenges must be anticipated to
ensure advance planning and efficiency in dealing with supplier information.

Key challenges of Supplier Information Management

1. Lack of a comprehensive and trusted view of information
One of the primary challenges of SIM is that there is no trusted view across the organization of
information available. This makes access to all the required supplier data difficult.

2. Operational Inefficiencies
The usual methods of managing suppliers and their information or data is often ineffective, and
outdated. This is also accompanied by several manual processes and unnecessary workload which
slows down the process to access information.

3. High Supplier Management Costs

This is another challenge that may be faced where there is a significant increase in costs related
to supplier management. The rise in the price of energy and fuel, increasing global consumers,
development of high technology, labor rates puts the operating cost at an all-time high pressure.
 4. Slow time market
The market is another challenge that may be faced. The onboarding of a supplier may take up to
several months, which slows down the entire process and can result in delay of time to market
for new products.

5. Supplier Risk and Compliance

The ability to assess risk and compliance of suppliers and the performance of the suppliers is
another challenge that may be anticipated. Changes in the market including politics and global
sourcing can result in several issues.

6. Customer Service and Relationship Management

The relationship between the supplier and the partner as well as between customers is always a
little on edge. This proves to be one of the simplest and also most complicated challenges as it is
highly subjective, and hybrid approaches may be needed to overcome such challenges.

Successfully overcoming the challenges

1. Central management of data
Through central management and governance of supplier data, it would become easier to view
the relevant supplier data across the entire business. This would also help in building stronger
supplier relationships due to the access of data and understanding the necessary information.

2. Supplier/Partner Relationship Management

By creating mutually agreed upon standards and agreeing to follow them, there is an enhanced
understanding between all parties. This would allow for better comprehension of the
performance and it would also increase foreseeability for opportunities to improve. There is a
need for a strong working relationship between the suppliers and the partners for SIM to work
effectively. Visibility and communication are the keys to maintaining a healthy relationship.

3. Manage Operational Inefficiencies

Using different workflows such as a workflow that is based on role and task, the departments that
are involved with supplier management would be able to contribute and collaborate with supply
chain teams to manage information and monitor performance, as there are specific tasks laid
down in which one can specialise and assist others.

4. Control Risk and regulate Compliance

Management teams would be able to monitor and analyse the risk of suppliers and the
compliance aspects through analytics programs and intelligent business tools that are up to date.
For risk management in particular, to increase effectiveness and efficiency, periodic assessments
and redesigns would be appropriate.
The risks should be:
· identified
· quantified

As Sun Tzu says: "Victorious warriors win first and then go to war, while defeated warriors go to
war first and then seek to win." Remain victorious, and assess the risk before moving forward.
 5. Better Customer Service
Consumer has always been king. And every customer has different needs. The modern world looks on
consumer customization to ensure the needs are satisfied to the liking of consumers. To improve
customer service, information is necessary. Customer service depends on the visibility of information. It
is vital that data is provided and information is supplied to facilitate decision making and communicating
the changes or shifts in the supply chain before they cause an array of challenges which could be
prevented.

6. Reduced Cost
There are increased operation costs and transportation costs which serve as a challenge. Battling this war
is a long process. The solution can be found in visibility once again of the supply chain. Technology is
where it all begins. It is the greatest weapon for the war. Investment in technologically advanced platforms
can allow for that visibility and help tackle the issues at hand.

The solution is not limited to just technology. In order to regulate cost and reduce expenditure, besides
the latest tech and gadgets that would assist one to lower cost, it is the management of information and
using the information that is available to make reasoned and sound judgments. There must be a plan. And
it should be flexible and adjustable in nature. Upon monitoring the plan, changes should be made to
ensure the plan is updated and on track.
Conclusion
“Planning is everything. The plan is nothing.”
Dwight D. Eisenhower

As Eisenhower stated, the value of planning is high, however, as defining objectives drives long term
strategy, one must also be flexible enough to change the logistical tactics you use to get there.

There are a few things that must be kept in mind to overcome the different challenges to SIM, and all
these challenges must be approached with an open mind to tailor-make the solution according to the
needs and requirements of each issue.

Things to keep in mind

1. Creating a vendor management program and updating it should be made as a top priority.
2. Creation of specific roles and designation of persons to these roles for collection and validation of
data would be useful for supplier information management.
3. Regular examination of resources should be conducted including a thorough analysis of the
budget.
4. A hybrid approach should be adhered to for information management and a flexible approach
followed.
5. There should be separate and intense focus on cybersecurity, especially where there are “fourth”
parties involved.

Though there may be quite a few challenges that are posed against SIM, these challenges can be overcome
to build a stronger system for management of supplier data. Information must be leveraged and used to
reduce cost and increase operational inefficiencies. For this to be done, it must be governed and
centralised to allow for greatest visibility.