Summary
The Problem: Lack of Procurement Coordination & Visibility Impacts Cashflow
Case Study: Delays to planned investment due to supply chain cash flow unpredictability
Benefits of Kavida
Content Manager
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We’ve spoken to manufacturers with procurement teams who are overworked and overwhelmed. They spend the majority of their week chasing suppliers for order acknowledgements and updates, dealing with frequent PO changes, or firefighting disruptions to their supply chain while trying to get their orders delivered on time.
Automating these manual workflows is a great way to tackle these issues at the source and improve buyer-seller collaboration as a result. A collaborative supplier relationship is about getting the best out of your interactions with suppliers to your business and making sure these relationships are as beneficial as possible. Improving collaboration is a crucial strategy for any manufacturer looking for a competitive advantage in today’s volatile market.
Over the course of this article, we’re going to deep dive into:
- How to use tech to reduce time spent coordinating with suppliers,
- Build stronger supplier relationships,
- And how to define a collaborative strategy that will contribute to overall business success.
The Biggest Blocker to Buyer-Supplier Collaboration
One of the biggest challenges in procurement is time constraints. Procurement teams often manage hundreds of suppliers and thousands of orders manually on email chains and spreadsheets, leaving little room for relationship building.
The endless chasing of tasks not only creates inefficiencies but also prevents procurement professionals from focusing on strategic activities that could drive more value. Here’s what we’re seeing:
Overwhelming Workloads
The sheer volume of tasks is daunting, leading to burnout and reduced productivity.
Lack of Focus on Strategic Activities
Time spent on manual intensive, repetitive tasks takes away from more valuable activities like supplier relationship management and strategic sourcing.
Inefficiencies and Delays
Manual processes are also prone to errors and delays, impacting overall efficiency.
Why is Supplier Collaboration Important?
There’s been a shift in how manufacturers view supplier relationships lately. It’s become more than just negotiating the lowest price. It’s managing the entire supplier relationship lifecycle, from selection and ongoing management through to performance review.
Future growth and industry competitiveness depends on this end-to-end experience.
The framework for a collaborative supplier relationship is built on four key pillars:
- Strategic alignment with suppliers
- Clear roles and responsibilities
- Regular communication
- Performance monitoring
Global events have shown just how important it is for manufacturing supply chains to reconsider how they handle supplier collaboration, and invest in the right tools. When the right tools are implemented, not only do these solutions free up a considerable amount of time to build stronger relationships, but they also play a big role in crisis management.
We’re living in a new era of instability where having poor visibility over your suppliers and your orders can collapse your supply chain.
Using the Right Supplier Collaboration Software
Procurement teams need better tools to collaborate with suppliers and get their orders delivered on time. This is where tech comes in.
Here’s what good tech adoption for improved supplier collaboration looks like:
- Automated supplier follow-ups to free up 70% of procurement’s time chasing suppliers, no change management process required for you or your suppliers.
- Using automation alerts to instantly identify high-priority order tasks, and potential operational and external risks impacting suppliers.
- Using automations + a copilot to generate real-time reports on performance metrics that improve supplier collaboration and enable data-driven negotiations. (Lead time, response rate, on-time deliveries, cost performance and quality). We’ll share more on how this works below.
Ultimately, adoption of tools, improved supplier collaboration and more accurate data on suppliers significantly increases your likelihood of becoming customer-of-choice.
Supplier Portals for Collaboration - Why Do They Fail?
A major challenge procurement teams and suppliers face when it comes to adopting tech: it’s not easy enough for them to use and requires them to change their standard workflow.
When it comes to choosing procurement tech, think about what really matters to your team. Does it meet you where you are at? Can users avoid big change management processes and having to spend time on training?
Here’s two absolute must-haves for your criteria:
- User-friendliness is critical or no-one will use it. Choose a tool that feels easy to use from the get-go. You want any user to pick this up quickly- no degree in rocket science required.
- It’s not just about the tech, it’s also about the people behind it. You need a provider willing to offer real, human support when you need it.
How Automation Can Improve Supplier Collaboration
Supplier collaboration should be done smarter, not harder. Our data shows that procurement teams spend an average of 3 business days a week chasing suppliers for updates.Automation addresses time constraints by handling mundane tasks such as order confirmations, follow-ups, and document management.
At Kavida, we created Agent PO to help solve this.
Agent PO sits in your inbox, integrating with your emails, to coordinate with suppliers on your behalf.
This frees up procurement teams to focus on strategic activities and relationship building. Additionally, automation establishes a consistent and reliable communication routine with suppliers, enhancing overall collaboration. Here’s how:
Automated Order Confirmations: Ensures that orders are confirmed promptly without manual intervention, reducing the risk of delays.
Routine Follow-Ups: Automated follow-ups keep suppliers on track and ensure that procurement teams are always up to date on order statuses.
Document Management: Automation handles the collection and organization of important documents, ensuring compliance and reducing the risk of missing information.
Real-Time Updates: Procurement teams receive instant notifications about order statuses, ensuring they are always informed.
This ultimately helps build routine with your suppliers,
Watch this video to see how we use automated workflows in action at Kavida to free up procurement’s time spent coordinating with suppliers and enable better buyer-supplier collaboration.
Using a Copilot to Improve Supplier Collaboration
The most valuable supplier data often lies in the inbox of procurement managers. Procurement spends most of their time on back-and-forth emails with suppliers every day, firefighting risks to get orders fulfilled on time.
Each of these interactions in the order fulfilment stage hold the critical data you need to decide which suppliers to use for all of that spend. We’ve spoken to countless manufacturing procurement teams who have all this data, but don’t have the time to structure it into something useful.
Using guesswork instead of concrete data to help you make decisions often means that manufacturers are missing out on significant cost savings, strategic sourcing and negotiation leverage. These manufacturers are also vulnerable to supplier risk
With a copilot running behind your automations, users can just jump onto the platform and get instant answers for questions like:
- I am meeting with [supplier A] to negotiate our contract. Please give me a summary of their performance.
- Which suppliers still need to upload their compliance documents?
- Who are my top 5 most responsive suppliers?
Watch this video to see how it works in practice.
What Does Strategic Supplier Collaboration Look Like?
Supplier collaboration strategy is not static. It evolves. Here’s how you keep up:
- It’s crucial that your suppliers are on the same page with your business goals. This alignment ensures that both parties are working towards common objectives and building mutual trust. This collaborative approach allows you to co-develop innovative solutions.
- Segment your suppliers according to your business needs so you know who to focus your time on and build stronger relationships with.
- Regularly assessing supplier performance against key metrics keeps the relationship transparent and accountable.
- Smart use of SRM software streamlines operations, providing valuable insights through real-time data analytics, and reduces up to 70% of procurement’s time spent chasing supplier updates. This also reduces the cost of potential disruptions.
- Remember, SRM doesn’t end with a contract. It’s a cycle that needs to be constantly adjusted and optimised for you to get the most of these relationships, and this is why procurement tech is essential. With a massive task list already on your plate, the right tools can help make this process more efficient.
Don’t make your next sourcing decision with a poor supplier collaboration strategy in place. We can help you build stronger relationships with suppliers to help protect your supply chain from future disruptions. Reach out to us today to see how.
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