United we stand. Divided we fall. That’s a great way to summarise the importance of buyer-supplier relationships in business world and public sector procurement. Buyers and suppliers who work together achieve much more than either working alone. Collaboration like this has many benefits, including:
Enhanced innovation
Sharing expert knowledge can reveal some surprising opportunities to improve operations, processes, services, and products. The result is a unique selling point (USP) that provides a competitive edge in the public procurement market.
Risk management
Long-term supplier relationships breed trust and reliability. If there was no trust or reliability there wouldn’t be a supplier relationship, let alone anything long-term. There is less risk when working with someone you’re familiar with and a whole lot more financial stability.
Better performance
When you build relationships with suppliers, it’s a good idea to treat them as partners rather than service providers. Partners have a vested interest in projects or contracts and up their game to go above and beyond quality expectations. This has a direct impact on customer satisfaction with the final product, not to mention the company’s reputation.
There’s a lot more to strong supplier relationships. We’re going to explore them in a bit more detail below.
eSourcing Platforms Improve Communication And Collaboration With Key Suppliers
eSourcing platforms started life as tender alerts or contract finder platforms. Suppliers registered and gained access to all new tenders relevant to their business offering.
They have evolved. Now, they have an array of features. For example, Delta eSourcing has added analytics to its stable of services, it’s a G-Cloud 14 framework supplier, it has resources that include webinars, case studies, and downloads, and it’s a Cyber Essentials partner.
eSourcing platforms or portals can also provide independent buyer and community portals and collaborative buyer portals that bring buyers and suppliers together for collaborative tender exercises. They are specific portals hosted by but separate from eSourcing platforms. They have their own set-up for email alert services whenever they publish a new contract.
Because they provide a central hub for specific contracts and tenders, their communication channels are always open and because they embrace the principles of transparency, all communication is available to all parties involved.
In addition to being able to quickly communicate with suppliers, platforms facilitate data sharing, for example, quick and easy sharing of tender documents and any guides pertinent to the contract. There are document templates and storage facilities – all of which streamline the procurement process, making it more efficient while cutting costs and saving time.
Supplier Relationship Management (SRM) & eSourcing
If you’re going to build great supplier relationships, you better have a reliable supplier relationship management programme. Aside from building deeper relationships, SRM aims to maximize the overall value of supplier interactions. eSourcing tools facilitate the process by:
- Reducing costs
- Improving service or product quality
- Inspiring innovation
- Mitigating supply chain risks
- Increasing agility and responsiveness
- Providing data for informed decision-making
eSourcing tools, like eTendering portals, play a critical role in SRM. For example, platforms include tech that automates much of the purchasing process. They also track orders and facilitate feedback and effective communication with suppliers.
Platforms make it easy to share information and documentation on the central hub, including product specs, delivery dates, and payment tracking.
This indicates transparency because everyone on the hub has equal access to the same information. There’s nowhere to hide, so there’s no chance to give one supplier an unfair advantage over the others. All steps in the procurement process are recorded so there is an unambiguous audit trail per regulatory requirements.
Many platforms have contract management features so buyers can keep an eye on things like performance, schedules, and KPIs.
All the data is available to stakeholders, who can also use the data to generate reports to meet compliance requirements.
Meanwhile, Customer Relationship Management (CRM) software enables you to track all communication with suppliers and vendors, keep an eye on metrics, and ensure everyone is well on their way to fulfilling their contractual obligations.
Supply Chain Management also plays a part in a buyer’s working relationship with suppliers. When you can see all the links in supply chains, you get a much better understanding of suppliers’ processes and potential risks, like a subcontractor with dodgy employment practices. You can collaborate to mitigate these risks and optimise opportunities that arise, like a subcontractor with the potential to switch to renewable energy and reduce costs.
eSourcing & Compliance
eSourcing or eProcurement systems help buyers and suppliers with regulatory compliance requirements, including laws and legislation, regulations, industry standards, and the terms and conditions of the contract.
Many platforms have built-in compliance checks, particularly for government bodies’ policies. This helps ensure spending follows the right channels and is authorised by the right people.
Tender documents from government bodies also cover compliance with various legal regulations, like labour practices, environmental sustainability, data protection, and quality assurance. Suppliers can submit certifications and accreditations via the eSourcing platform. These documents can be stored in the system, so there is no need to upload them for every tender.
There are several steps buyers can take to ensure supplier compliance, starting with clearly defined expectations and requirements regarding performance, quality, delivery, and pricing of raw materials. It can be helpful to provide training that demystifies certain regulations, particularly for sustainability and ethical conduct.
eSourcing & Sustainability
The versatility of eSourcing tools helps buyers and suppliers connect over common goals and values regarding social value initiatives, sustainability, and innovation. For example, data gleaned from SRM and contract management provides insight into suppliers’ sustainability credentials, like waste production, energy usage, and waste disposal.
Collaboration, training, and ongoing improvement are all opportunities for buyers to work with suppliers to enhance their sustainability efforts, which reflects well on them both.
Innovation is often a happy side effect of these efforts because improvements tend to require creative production processes and business operations. If the tech is not available to make these improvements a reality, suppliers and buyers will have to develop their own tech to meet their needs.
For innovative solutions to have a significant impact on the environment and local communities, they must be implemented up and down supply chains. Regular communication at each level of the supply chain reveals unique challenges. Collaboration between internal and external teams helps adapt sustainable solutions to suit each link in the chain.
All of this, and more, is possible thanks to the features and functions in eSourcing tools, including platforms that prioritise transparency, communication, and fair competition.
How To Enhance Supplier Engagement With eSourcing
Successful supplier engagement boils down to two Cs:
1) Communication
2) Collaboration
The 2 Cs enable you to:
Engage suppliers in discussions about more than contract requirements. Platforms allow buyers to create their own community portals where they can easily – and transparently – communicate with existing and potential suppliers. Questions can be asked and answered, eligibility criteria can be clarified, and roles can be defined – everything you need to lay a foundation for healthy supplier relationships.
Use document storage and sharing to open the floor to discussions and information sharing. Diverse suppliers whose services or products complement one another – as opposed to being in direct competition with one another – can share expert knowledge, swap ideas, and generally get their creative juices flowing.
Setting common goals, keeping expectations realistic, and narrowly defining contract requirements are all good tools to kickstart engagement and get to know new suppliers. You can use data available to weed out the suppliers who aren’t a good fit and encourage those who do to maintain relationships even if they don’t win a particular contract.
It’s all about who you know, after all.
Delta eSourcing’s procurement platform for buyers and suppliers has all the features and functions you could possibly need when establishing and nurturing mutually beneficial relationships.
Contact us to find out more about how our platform helps engage suppliers who can give your contracts the full cost efficiency boost they need to deliver extraordinary results. Alternatively, book a free demo to see for yourself how our services can help you.
