How to improve Supply Network?

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 with your suppliers

The organization may try to concentrate its processes with a small number of top-tier suppliers. This will enable the organization to deal with only a fewer number of suppliers. This makes sense if the top-tier suppliers are able to meet and surpass the expectation of the organization to them. 

Benefits of Supplier Network for Suppliers and Buyers

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. Due to this, there is a reduction in errors and delays due to paper flows.

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, invoice, 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, Supplier network integrates with 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 Supply 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 only offer a partial solution. 

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

• The supply 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.
• Supply networks may require significant internal training time. 

Although the supply 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

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 the onboarding of potential suppliers 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. 

What is Supply Network Collaboration?

Supply network collaboration is the process of two or more organizations collaborating with one another to plan and execute activities across their supply chain network. This may take many forms such as sharing of information, expertise, and resources as well as joint planning. 

A high level of trust, transparency and communication between organizations are needed to have an effective supply network collaboration. By working together, organizations can enhance and streamline their supply chain process, lower costs, and meet customer demands. 

Furthermore, by collaborating with other organizations in their supply chain, businesses can gain a competitive advantage and better position themselves to adapt to the changing demands of the market.