Written by Marijn Overvest | Reviewed by Sjoed Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

What is a Supplier Network? 

A supplier network is a group of suppliers or vendors that works together to helps an organization add value for customers by producing or delivering a product. 

These networks are often online platforms where businesses and suppliers from different parts of the world can connect and work together. They make it easier for companies to find the right suppliers based on what they need—such as the type of product, price, or location.

It gives organizations numerous options from which they can select suppliers according to their preferences such as product, prices, and location. Thus, it reduces costs and increases the profits of organizations. 

Usually, organizations like supplier networks due to the following reasons:

• Reduced purchasing cycle times
• Enhanced visibility of order, invoice, and payment status.
• Reduced paper invoice volume and manual processing
• Improved contract terms

Supplier Network Collaboration Tips

Supplier network collaboration is the process where companies and their suppliers work together. They plan activities, share information, and solve problems. The goal is to make supply chain operations more efficient.

Companies and suppliers often use digital platforms. These tools allow real-time updates on inventory, orders, and forecasts. This helps both sides make faster and better decisions.

To get started, companies need to set shared goals, keep communication clear, use simple technology, and build trust by being reliable and transparent.

But lasting success comes from how the collaboration is maintained. Regularly reviewing performance helps keep things on track. Asking for feedback gives suppliers a voice and reveals ways to improve. Starting small makes it easier to test and refine the process. Joint planning helps avoid delays, and recognizing good work strengthens the relationship.

Done well, supplier collaboration leads to fewer errors, lower costs, and a more flexible, resilient, and sustainable supply chain.

Once these basics are in place, collaboration can continue to evolve. A few ongoing practices can make the partnership even stronger: 

1. Review Performance Often

Track key metrics like delivery times, order accuracy, and quality. Regular reviews with suppliers help identify opportunities for improvement.

How to do it:

Track supplier performance using clear numbers. Focus on delivery speed, accuracy, and product quality. Create a shared scorecard to record these results. Hold short review meetings to discuss progress. Point out both strengths and problems. Agree on next steps and follow up. Regular reviews keep everyone aligned and motivated.

2. Ask for Feedback

Encourage suppliers to share suggestions. Listening and acting on their input can lead to better processes and stronger engagement.

How to do it:

Let suppliers share their ideas. Use short surveys or ask questions during meetings. Keep it simple and open. Show that you listen. Make changes when ideas add value. Let suppliers know when their feedback leads to improvement. This builds trust and strengthens the working relationship.

3. Start Small

Pilot your collaboration model with one or two suppliers. This allows you to refine the process before rolling it out more widely.

How to do it:

Pick one or two suppliers to try a new way of working. Choose a simple area to test, like order updates or delivery tracking. Set a short timeline. Watch how it goes. Use the results to improve the process. Once it works well, expand it. Starting small helps reduce risk and builds confidence on both sides.

4. Plan Together

Joint planning for production and delivery reduces the risk of delays and shortages. When both sides align their schedules, efficiency improves.

How to do it:

Set time to plan with your suppliers. Share key data like order volumes and delivery dates. Ask them for input on capacity and lead times. Use a shared file to keep everything clear. Align on steps, deadlines, and who does what. When both sides plan together, delays are less likely.

5. Recognize Good Work

Acknowledge suppliers who meet or exceed expectations. A simple thank-you can go a long way toward building lasting partnerships.

How to do it:

Notice when suppliers do well. Say thank you. Send a quick message or mention them in a team meeting. Good suppliers value recognition. Simple praise builds loyalty and keeps performance high. You don’t need a big reward—just show that their work matters.

How to Improve Your Supplier Network?

If you’re wondering how to improve your supplier network then wonder no more! The answer is listed down below.

1. Outsource activities to Suppliers

An organization can try to shift from an in-house function to a supplier. It makes sense when the organization wants to concentrate on its core competencies or when a function is proven to be difficult to manage. When outsourcing occurs, the number of top-tier suppliers increases. 

2. Take in-house activities

The organization may also decide to do the reverse and take back in-house functions. This is more likely to happen if no supplier is able to supply the required level of service. 

3. Concentrate on your suppliers

The organization may try to concentrate its processes with a few top-tier suppliers. This will enable the organization to deal with only a few suppliers. This makes sense if the top-tier suppliers can meet and surpass the organization’s expectations. 

Benefits of Supplier Network for Suppliers and Buyers

Here are the benefits of a supplier network for suppliers and buyers that you should know about!

1. Reduction of manual efforts

The automation of data entry, data transfer, and data processing between parties limits manual effort. It reduces processing time and streamlines the flow of information between parties.

2. Catalog management

A supplier network helps organizations upload catalogs for different sets of customers. The variables include the item specifications, future pricing, and special offers to avoid any confusion. 

3. Simplify the sourcing process

The sourcing process is simplified when the organization and the suppliers can respond to sourcing events on an interactive forum. 

4. Reduction in paper flows

E-invoicing is one of the advantages of the supplier network. The procurement team and finance team work together to cross-check the items ordered and paid for. Due to this, there is a reduction in errors and delays due to paper flow.

5. Contract management

A supplier network allows the organization and suppliers to be aware of their commitments, expectations, and obligations toward each other. This reduces contract violation that starts from miscommunication regarding the contract. 

6. Reduced purchasing cycle times

Supplier networks allow parties to build a strong relationship due to the smooth flow of information that results in the timely processing of delivery, orders, invoices, and payments. Thus, it enables the organization to reduce the purchasing time cycle. 

7. Up-to-date supplier information

Information of the suppliers must always be updated. The Supplier network integrates with the supplier management software and allows onboarding of suppliers. 

8. Increase visibility and better relationship

The supplier network gives the organization and the suppliers a clear view of order, invoice, and payment status since both parties need to work in collaboration. Thus, it helps the parties to trust each other and establish a stronger relationship. 

9. Improve supplier performance management

The supplier network allows suppliers to monitor their performance and development reports. Through this, the suppliers can improve in the areas that seem lacking. 

Things to Consider When Employing Supplier Networks

Supplier networks can help you achieve your goals through its benefits. However, if you want to realize all the benefits of accounts payable automation, supplier networks, payable outstanding only offer a partial solution. 

The following are the points you need to consider when using supplier networks:

• The supplier network only addresses the invoices of suppliers who have participated in the program. Thus, leaving all other invoices to be processed manually.
• Asking vendors to pay third parties to submit an invoice may create friction in the supply chain of the organization and may harm supplier relationships.
• Supplier networks may require significant internal training time. 

Although the supplier networks are only a partial solution, it still depends on your needs if you will employ it as it has its own benefits too.

What is Supplier Network Management?

Supplier network management is the process of managing the activities of suppliers and buyers involved in the same supply chain network. It involves identifying, assessing, selecting, and managing supplier relationships to ensure they meet the company’s requirements. 

Additionally, it helps discover opportunities for buyers and speeds up the procurement cycle which results in the timely selection of goods, delivery, and payment. It gives plenty of options for buyers to select suppliers according to their preferences.

Benefits of Supplier Network Management

Here are some benefits you should know about supplier network management.

1. Automation

The automation of processes between the seller and the buyer limits manual effort, shortens the processing time, and streamlines the flow of information between parties. Additionally, there is a reduction in errors and delays due to automation. 

2. Simplified Sourcing Process

The sourcing process is simplified as suppliers and buyers respond to sourcing events on an interactive forum. They can easily see the event scores through a supplier network. 

3. Contract Management

Supplier network management allows both parties to know their obligations and expectations at all times by keeping a close watch on the terms of their contract. Thus, it greatly reduces contract violations that will help both parties to communicate and easily finish their collaborative project. 

4. Updated Supplier Information

Supplier network management solutions enable potential supplier onboarding in real time. Thus, all the information about the suppliers is up to date. 

5. Visibility and stronger relationships

The fact that both parties need to collaborate, gives them a better vision of the order, invoice, payment, and delivery status. Thus, it helps both parties to trust each other which enables them to build stronger relationships. 

Conclusion

Understanding and improving supplier networks, efficient supplier network management, and fostering collaboration across the supply chain are crucial for organizations. These practices lead to reduced manual efforts, streamlined processes, improved visibility, and stronger relationships.

Embracing supplier networks, management, and collaboration can provide a competitive advantage and better position organizations to adapt to market changes.

Now that you’re done reading this article, I have created a free-to-download editable deal comparison template. It consists of a PowerPoint file and an Excel file, which can assist you in determining the most suitable suppliers for your needs. I’ve also created a video where I explained how to use this template.