In the world of the supply chain and logistics processes, having multiple sources of procurement is a common theme. Often, companies will need to find multiple sources of procurement for the best possible material sourcing, and for high quality relationships. This, however, can become complex. Having multiple sources means managing many different relationships and other processes that accompany it. With this overwhelming task, companies can easily make mistakes which can be costly.
Supplier management for these reasons is a great choice for any company with multiple sources of procurement. It involves outsourcing the management of vendors for procurement. These professionals will typically have significant experience in improving the efficiency of these processes and keep the operation running smoothly.
If you are feeling overwhelmed with all of the vendors you are dealing with, and want to improve transactional efficiency and vendor relationship, then outsourced supplier management might just be for you.
Read on to find out what they can do for your logistics processes.
Reduced Price Volatility
Price volatility involves reducing the fluctuation of goods. Fluctuation of goods can happen for a number of reasons, including shortages of materials or increased demand for a certain product. This can mean that your business may miss out on products at some point, which could harm your business. When outsourcing your supplier management to professionals, you are able to reduce price volatility. A way this is done is by negotiating a fixed price agreement with the vendor. In doing so, you may fix a certain price, and they are obligated to supply you with products regularly. These fixed prices are usually agreed upon through supplier management by agreeing to a certain price for a set period of time, before having slow increases in price over a long period of time. Both you and the vendor win, and you ensure stock is always available for you.
Streamlines the Supply Chain
The supply chain is something that involves many different processes, and when these processes pile up, it can get out of hand. This can make managing the supply chain difficult and complex. With supplier management, you help to reduce the number of vendors you work with, which helps to streamline the supply chain. In streamlining the supply chain by reducing the number of vendors, they are able to focus on specific relationships which would be beneficial to the company. They are able to bargain better deals and ultimately save costs for the company. With supplier management, they are also able to gain more valuable information, such as what the supplier is looking for in a buyer and how they can meet these demands to garner good deals.
Improved Flexibility of Supply Chain
Flexibility of the supply chain is vital, as it means that it can react quickly to any changes that may disrupt it. In doing so, it can minimize disruption and keep the supply chain running smoothly. To achieve supply chain flexibility, supplier management will typically take the advice of its own consultants and experts in order to apply these to their client company. In making these changes, the client company can improve flexibility. Further, the client company has access to the resources and technology that supplier management companies provide, and this will further improve flexibility, as they can react better in case of any disruptions.
Supplier management is a crucial part of a successful supply chain, and here at BCR, we understand this better than most. For this reason, we offer supplier management, in which we will help to automate schedule exception reporting, provide PO management, help to set up KPIs, monitor vendors and their compliance and streamline information flow through our exceptional warehouse management.
Feel free to contact us now for a consultation!