An integral part of a good business model is a streamlined purchasing process. Purchasing is one of the crucial aspects of the business but somehow never gets the attention it deserves. If you happen to be someone who is struggling to increase revenues for your business and have tried different mechanisms to try to do so, we believe you should take an in-depth look at your purchasing process to make appropriate changes.
A streamline purchasing process can help you run your business in a much more efficient way and save you precious time that you can invest in other aspects of your trade.
Technology has emerged to be a great mechanism which can simplify the process.
Various E-Procurement systems have found their way into the B2B business chains and effectively reduced the manual intervention in the process. With modern protocols like Punchout Catalogs, suppliers can send you personalized products that suit your requirement thus eliminating the need to browse through an entire library of supplier’s products that have no significance to your business. Additionally, taking your purchasing process online, you can access a plethora of suppliers which increases your chances of finding a more cost effective supplier.
Here Are 7 Practices That Can Significantly Aid Supplier Enablement:
1. Communication Is Key
Communication is an important virtue of your relationship with the supplier. It is always a good idea to keep the supplier in the loop if you’re updating your P2P system or when simply flagging product updates. It is essential that you maintain a good rapport with the supplier or the supplier company and pay your dues on time. If things do not go as planned, then anticipate the timeline when you will be able to clear the dues and communicate them about the same before the deadline. This will help in establishing you as a trustworthy buyer that they can rely on.
Always be on your best behavior when negotiating terms and prices of the supply.
Indirect threats or aggression along with inappropriate negotiation stunts are bound to deteriorate the relationship and will also keep other suppliers at a distance. In fact, try to understand that the suppliers are a valuable part of your business and give them the same respect that you treat your co-workers with.
If they happen to be your key suppliers, then you could go an extra mile and meet them for informal coffees once in a while. This informal communication will help to build trust and make them concerned about your business. These tips can work wonders for you if you see this partnership strategic in your long-term goals.
2. Migrate Punchouts When Possible
Punchout Catalogs have proven to be a boon for the B2B businesses.
A supplier is able to send personalized catalogs to the buyer, each time he raises a request for different items. This improves the accuracy of the catalog since the buyer does not have to waste crucial time in browsing through the entire library of products.
However, these Punchout catalogs are disjointed and can often lead to inconvenience when dealing with a consistent supplier. Migrate these catalogs whenever possible to maintain the workflow of the company.
3. Quality Over Quantity
Communicate with the supplier about your needs. Encourage them to provide high-quality catalogs of their products with accurate information when possible. Always look for a few things in a catalog like:
Accuracy: Ensure that the catalogs provided by the supplier are highly reliable and do not contain the products that were not explicitly required by you. Further, advocate the need for exact information that defines the product and its uses in the easiest way. Make sure that no data is misleading for the customer.
Validity: Companies launch and discontinue products all the time. Naturally, there are instances when the catalog contains some of the products that have been discontinued or may miss out on the product that was recently introduced. Ask your suppliers to regularly update the catalogs to ensure that customers do not end up ordering the wrong product.
Relevance: Other important criteria that you need to assess the catalog on is the relevance of the information provided about the product. If the information provided by the supplier is of no connection to the buyer than the customer is unlikely to buy the product. The information should also help to market the product better and therefore have an appealing content.
4. Let Your Suppliers In
Suppliers feel very empowered when you let them in on your business developments. Be honest about your projections and give them as much lead time as possible. Some strategic suppliers play a crucial role in your procurement process, and they should be given the respect they deserve.
Invite them to meetings when you feel they can provide valuable input to the discussions. If they have a concern about how things proceed, they might be able to express their doubts in front of the board. When they can have a look at things from the inside, they might be able to educate themselves about how things work at your firm and what is expected of them. This will make them perform with a different zeal since they will be deeply invested in your goals.
Make them feel welcomed when they come for supplier meetings, give them a tour of the whole place and take them to your private office to give things a personal touch.
If you happen to have a business event or party at the office, then take the initiative to invite them personally.
They need to feel they are a valuable part of the business. Enlighten them about your upcoming products to keep them in the loop. Personalizing your relationship with the supplier will help you to know them on a personal level and build a solid partnership.
5. Implement A Rewards System
It is natural to have more than a few suppliers if you have a large corporation. There are times when a supplier might not be happy with you prioritizing a competitor over him for the benefit of the business.
These suppliers might start under performing which can land your entire procurement process in a state of havoc. In fact, on a rare occasion when your key supplier isn’t able to provide you with the goods, you will not be able to depend on your substitute suppliers either.
To overcome this problem, consider keeping a healthy competition alive between the suppliers. Provide them with ample rewards and incentives by judging them on specific criteria like:
• Quality of the content in the catalogs
• Best use of advanced features in the catalogs
• Earliest deliveries of the content
This will ensure that the suppliers feel rewarded for their performance and the healthy competition will enable them to do better than their competitors.
6. Simplify The Process
According to some experts, having too many vendors can prove to be very inefficient for your procurement process. This can be overwhelming and significantly increase the administrative costs.
There are a few troublesome vendors who have been persistently inefficient and neither can be counted on when an unprepared for situation presents itself.
Therefore, consider working with a few key suppliers that can be trusted to build a healthy relationship. Working together with these people will help in controlling the costs and thus increase the efficiency of your purchasing process. When choosing your key suppliers to evaluate which of those:
• Deliver the goods on time
• Are more cost efficient
• Willing to communicate
• Provide the best quality
Evaluate supplier performance quarterly and keep a check on all the credentials. Make changes to your list of priority suppliers annually if necessary. Frequent changes can disrupt the workflow of your business which can reflect in the revenues. Good suppliers are strategic partners that should be able to move with your company as it changes and grows.
7. Make Consistent Addresses A Priority
There are times when your key suppliers aren’t able to provide you with the necessary goods dues to unavailability, or you might find another supplier to be more cost-effective.
Times like these are inevitable and you have to work with new suppliers now and then. Make sure you are consistent with your delivery addresses which will save both time and money for you and your supplier.
Order management systems can perform significantly better when the shipping labels are accurate, thus reducing the risk of wrong deliveries. It can help in streamlining your purchasing process as you will have to spend lesser time on manually checking and correcting addresses.
Since order management systems eliminate or at least reduce the human intervention, there are a lot fewer errors, and you are also able to cut down on administrative costs. The deliveries are hassle-free and always on time.
These tips have proven to aid the supplier enablement significantly and eventually translate to higher revenues and increased efficiency in the work-space. Implementing a carefully crafted plan consisting of these tips is bound to take your business to new heights.