Collaborative Supplier Management boosts business objectives

Collaborative Supplier Management is the recognition that people are the driving force behind business.

A new study carried out by leading global spend management cloud provider, Ivalua in conjunction with Forrester Consulting, reveals that businesses are increasingly turning to procurement to support their objectives, including top and bottom-line financial performance.

The study in question found that 79% of businesses are looking to procurement to support more of their objectives than they had in the past.

The trend is due, in part, to the impact disruptions have played in shifting organisational focus on suppliers and supplier outcomes.

As the study notes, “suppliers are playing an increasingly critical role in business success, particularly in volatile markets.”

To support these new objectives, businesses are increasingly turning to collaborative supplier management.

Collaborative Supplier Management is a process that involves working closely with suppliers to identify and implement opportunities for cost savings, risk mitigation and innovation.

Once again the linchpin of enterprise rests on people, (etymologically, there can be no enterprise without hands).

The study found that businesses that engage in collaborative supplier management are more likely to achieve their business objectives.

Top and bottom lines

In fact, results revealed that businesses that engage in collaborative supplier management are:

• 2.5 times more likely to achieve their top-line growth goals
• 2 times more likely to achieve their bottom-line financial performance goals
• 1.5 times more likely to achieve their sustainability goals

The fight against inflation

The study also found that collaborative supplier management can help businesses to mitigate the effects of inflation.

In particular, it found that businesses that engage in collaborative supplier management are more likely to:

• Find new, lower-cost sources of supply
• Increase operational efficiency
• Collaborate with existing suppliers to find ways to reduce total costs

Collaborative Supplier Management: "A critical tool"

Collaborative supplier management is a critical tool for businesses that are looking to achieve their business objectives in today’s volatile markets, the study found.

It notes that technology can play a key role in enabling Collaborative Supplier Management.

“Technology is a critical enabler of effective supplier management strategies, providing the data needed to assess and monitor suppliers and the ability to collaborate efficiently with them,” said Alex Saric, smart procurement expert at Ivalua.

“Yet many of today’s solutions deliver speed at the cost of agility.

"Given rapidly evolving market conditions, regulations and business priorities, leaders must evaluate technologies based both on their ability to meet today’s requirements and their flexibility to quickly support new processes and data.”

Recommendations

The study recommends that businesses that are looking to implement collaborative supplier management should:

• Get executive buy-in
• Develop a clear strategy
• Invest in the right technology
• Focus on building relationships with suppliers
• Measure and track results

By following these recommendations, businesses can use Collaborative Supplier Management to achieve their business objectives - and gain a competitive advantage in today’s (and tomorrow's) volatile markets.