Why is intelligent supplier management so important?

Why is intelligent supplier management so important?

Especially with a large supplier base, many different purchased parts and complex production processes, it is enormously important to maintain an overview. Intelligent supplier management mapped directly in the ERP can help to monitor all order processes and the associated invoicing and significantly simplify the workload of the specialist departments.

The data available in an ERP system increases considerably over time: The master data for materials and suppliers naturally grows with the developments in the company. In addition, it is becoming more and more important to know in which form the cooperation with which suppliers takes place. What is the quality of the goods? How is the delivery reliability? Which supplier has proven itself over the last few years, which one has perhaps not even reached agreements? 

and put the process at risk? Knowing which supplier delivers which component at which conditions is also a real competitive advantage.

Intelligent supplier management creates transparency

For these reasons, the importance of intelligent supplier management that can quickly and accurately provide answers to these questions has grown in recent years. The importance of IT has also increased in equal measure: Linking data between customers and suppliers has become just as important as internal analysis.

And this is not just a "gut feeling": In 2019, the BME (Barometer Electronic Procurement) was able to find out through a survey that the digitalization of traditional procurement processes is increasingly taking hold in all companies. The survey aimed to investigate the current state of digitalization as well as future developments in selected areas of purchasing and supply chain management. Particularly interesting among the 

Results: Supplier management tools clearly top the list of investments, with 92.4% of respondents across all industries seeing the use of intelligent supplier management solutions as imperative.

Important advantages of intelligent supplier management

Evaluating suppliers, identifying duplicate data sets and networking one's own material groups are sometimes significant advantages that intelligent supplier management brings with it.

1. the possibility of supplier evaluation

If you have been able to gain experience with some suppliers in the course of time, you can draw conclusions about the quality of the supplier relationship according to internal ideas. These can be mapped quite simply on the basis of evaluations that rank the supplier within the system. These intelligent evaluation mechanisms are not only important for ranking the supplier, but also for creating transparency.

The options for evaluation can be defined by the user: Using the app, evaluations can be carried out quickly and easily based on questionnaire-supported processes. This is easy and quick to implement and makes the supplier transparent across departments. Weightings within the evaluation criteria are also possible, so that the results can also be compared with each other on an extended level.

For example, CLC has been awarded a contract by a major municipal energy supplier for a App-based Supplier evaluation implemented in SAP ERP. Project manager Cedric Schonard is convinced that the app reliably provides an overview of supplier evaluations. In preparation for the implementation phase

could the The client had to define the criteria that were important to him in advance. These included the following questions, among others:

  • How was the project overall?
  • How was the coordination with the supplier?
  • How was the quality of the delivery?
  • Were reliable deliveries made and statements kept?

2. the identification of duplicates

As the number of order processes increases, it can happen that suppliers are unintentionally created twice in the system. Sometimes there is not enough time when an order has to be created quickly or the unintentional duplication happens for another reason. As part of intelligent supplier management, it is possible to identify duplicate supplier master data and either delete or cleanse it. If duplicates are identified during an ongoing project, these findings can also be collected and later purged in total.

Duplicate master records not only result in significant additional work in the work processes - good data quality also supports smooth, digitized and thus cost-saving invoicing and compliance. Thus, "clean" master data is also of enormous importance for financial accounting.

For example, CLC was able to identify duplicates and clean up the master data for a well-known automotive supplier in the course of a customer project using a multi-stage approval process. "Such an approval process involves all the departments that are involved with the

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 vendors in the system. A detailed check is performed to determine whether the duplicate may be deleted. If this is the case, the data records are removed in a controlled manner, thus significantly increasing the data quality in the ERP again," says Schonard.

3. networking via product groups

The fact that strategic supplier management also enables allocation via material groups makes the purchasing process even easier. This not only applies to the search for a suitable replacement supplier if the usual supplier is not able to deliver the goods, but also significantly supports the supplier search for new products and material groups.

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The existence of existing and current contracts can also be checked here, as optimization potential is often wasted here. If the conditions of the previous supplier are significantly more expensive than those of a comparable supplier, savings opportunities can be quickly identified here.

During the support of the large municipal energy supplier, the importance of the networked product groups became apparent in practice. "During the planning for a road construction project, the supplier network was so busy at a certain point that it was no longer possible to work with the regular suppliers," Schonard recounts. Thanks to the digital supplier file, however, the company was able to quickly switch to an alternative supplier without jeopardizing the planned start of construction.

We will gladly advise you!

Is intelligent supplier management also an interesting topic for you? Contact our CLC experts, who will be happy to help you with their many years of experience!

Further information

SAP-based control of complex procurement processes? No problem!

May 7, 2024

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