In times of uncertainty, are two heads better than one? In cases like procurement, the answer is a resounding yes!
COVID-19 has shown us the dangers of not being forward-thinking when it comes to the supply chain system. No one saw the effects of a pandemic coming, but once the supply chain was disrupted, many companies were struggling to find a path forward.
It’s now more important than ever to ensure strong vendor management and supplier collaboration that can ultimately benefit both sides.
The Growing Need for Improved Collaboration with Suppliers
A recent McKinsey report noted that companies that have prioritized strong collaboration with suppliers tend to outperform their peers. Specifically, the report mentions that collaborative relationships result in up to 2x growth and other metrics.
This growth, at least in part, can be attributed to the increased responsiveness collaboration brings when businesses must quickly shift to new market demands. Business demands and the speed at which they occur are increasing, forcing buyers to increasingly rely on their vendors for support.
Suppliers are no longer seen as just providers of materials and goods. In today’s market, they’ve become valuable consultants that can help you navigate changes in the industry, identify unforeseen roadblocks, and maintain a competitive edge over other companies.
What Does Strong Supplier Collaboration Look Like?
McKinsey states that a desire to improve vendor management isn’t always enough. For starters, developing collaboration efforts and systems can take a significant time investment before they start to generate value. This could lead both parties to abandon those projects in favor of something simpler and faster, even if the outcome will be worth less.
The reality is that supplier collaboration can take many forms, each of which should focus on the shared value that collaboration creates.
For some companies, this could take the form of joint product research and development or co-marketing for a new offering.
For many organizations, improving supplier management will focus on traceability as more end-users push for more sustainable products and manufacturing processes. Companies are increasingly relying on their suppliers to provide transparency into their sustainability practices and ethical sourcing, which also relies on greater transparency throughout the supply chain.
Another opportunity could be to establish better logistics in delivering inventory. COVID-19 has revealed that even small delays in delivering products to end-users can create a number of inefficiencies and missed business opportunities. As speed becomes an increasingly important factor, vendor management can help to streamline procurement.
How Specright Supports Supplier Collaboration
Specright’s supply chain data management system gives buyers and vendors alike an abundance of opportunities to create win/wins. By centralizing data in a single source of truth, vendors can earn buyers’ trust by providing insight into sustainability, product sourcing, and logistics. Likewise, buyers can use their data to continue meeting consumer needs, predict spikes in demand, and simplify every product’s journey to market.
Download our ebook today to learn more about how Specright is creating stronger supplier relationships for better procurement.