What is Supplier Management?

Supplier Management

Supplier Management is the term used to describe scouting for, inspecting and engaging in business with suppliers. All online research, site visits and performance audits, negotiating contract terms, getting quotations and managing payments are in the scope of supplier management. Retailers are always looking for the most profitable ways to bring products to market. This essentially means an increased dependence on suppliers and wholesalers. A top-down view of the supplier-side business is important for the success of a retail business. Suppliers impact the buying choices of shoppers and therefore, it becomes necessary to nurture a healthy working relationship with them. Building and preserving this liaison falls into the scope of ‘Supplier Management’. Effective Supplier Management increases customer satisfaction, ensures better product quality and quality of service from the supplier, while reducing costs at the same time. Supplier Management begins with finding the right suppliers that can provision the goods or services on contract or as-need basis. Retailers must consider pricing, capacity, quality and turn around time while deciding on a supplier. It is necessary to have a clear view of the supplier’s finances, insurance policies and certifications. Post selection, supplier management is all about managing a pool of suppliers – assigning jobs, checking performance and compliance to contract terms. Commonly, retailers have multiple suppliers for a single product enabling backup suppliers to step in if the preferred one cannot deliver. As a practice, retailers need to keep a comprehensive database of supplier information including contact details, certificates, insurance paperwork, and taxpayer identification numbers. It is important to sign a non-disclosure agreement with the supplier if there is a need to access sensitive data. It is necessary to keep this information, including related documents, as current as possible. Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.    

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