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Posted on 7/15/2020

Why Supplier Data Management is a Key Part of Your Digitization Strategy

William Crane

A robust process and the supporting systems for managing supplier information can create a competitive advantage for manufacturers and allow them to outmaneuver competitors. Large amounts of data, specifically supplier identification, qualification, and engagement information, has become overwhelming to track. Further, the data required for processing, distributing, and selling products is often inaccurate, inconsistent, and incomplete.

The fact remains that most manufacturers have no consistent strategy when it comes to managing supplier data. Supplier data tends to exist in silos across different offline systems and in different functions within the organization. Unpacking the challenge further, many small to middle market manufacturers rely heavily on the tribal knowledge of their most experienced supply chain professionals to store supplier information, usually in their heads.

Ultimately, these fragmented and antiquated ways of managing critical supplier intelligence data make it difficult to effectively execute supply chain tasks and collaborate with suppliers. As newer generations, such as millennials, have entered and ascended in the workforce; the tribal knowledge gap has grown causing problematic supply risk challenges. 

Standard Data Home Lowers Supply Risk 

Today, nimble cloud software productivity tools are allowing supply chain professionals to better manage supplier data concurrently. These newer software tools are empowering more efficient collaboration through automated sharing of data across teams.

Significant near-term productivity gains can be realized by creating a shared digital home for critical supplier data. Notably, supply chain professionals can free up their time to focus on more value-added strategic supplier relationship work. Defining where and how you will organize your data can elevate the collective organizational knowledge of your suppliers, their capabilities and relationships. This enhanced consistent record of truth on suppliers is proving invaluable in mitigating and eliminating supply risk.

Leaders today are developing robust supplier information management strategies, that include a home for the data, and standard processes for building and maintaining supplier lists, capabilities, and interactions.

Digitize Your Supplier Data to Improve Speed 

Many manufacturers have supplier and sub tier supplier data in various paper and digital formats. A key tenant of Industry 4.0 is consolidating this big data so that real time insights can be leveraged by your team. You will need to consolidate, clean and digitize your existing supplier data ahead of gaining any powerful insights. This initiative can be grueling work; engaging a third party services firm that has the proper equipment e.g. digital scanners to convert paper into electronic records, in many cases will not only save you time, but a few headaches along the way. Industry domain expertise is also critical to your digitization strategy. For example, if you are a leader at an automotive tier I driveline supplier, you should seek out services firms that have direct experience in your commodities, and watch the quality of your supplier data dramatically improve. 

Once you have your shiny new data avoid reverting to traditional manual data management. Upload your data to a collaborative cloud software platform, such as a Supply Performance System, that will empower your team to track current supplier information real time as well as add future new and potential supplier information.

Enrich Your Supplier Data to Gain Visibility

Select software applications host a large database of existing supplier data. Overlaying your data on top of existing data offers a quick boost to your collective supplier intelligence. In-depth supplier management software can offer in-depth insights into supplier capabilities, financials, ownership, certificates and locations among other key inputs.

Engaging a technology enabled managed services company, combination of software and people expertise, can present a unique opportunity for manufacturers to continuously enrich their supplier data. Popular use cases include, manufacturers tapping managed services firms to proactively monitor supplier risk, maintain supplier intelligence data and remediate onsite supply issues.

Automate Your Supplier Data to Reduce Workload 

The latest supplier management software technologies allow users to add new data e.g. unique supplier manufacturing processes capabilities to existing datasets real time. This real time concurrent editing empowers users to read, write and view data. Further, this functionality solves the problem of having to document new supplier search data and capabilities offline in manual analysis tools such as Microsoft Excel.

The challenge with custom engineered systems such as an automotive front-end assembly, is there are ever evolving parts and manufacturing processes required that need to be considered. As electric motors are added to support newer electric vehicles, supply chain teams can swiftly add these new commodities to their database without needing to engage their IT team. Customizable supplier databases allow experienced professionals to overlay specific industry and company preferences to better maintain supplier data.

Foster Strong Supplier Data Management for Greater Agility

As with building a talented high performing team, there are many small steps that added together can make a big impact in overall results, supplier data management is no different. Supplier identification efforts are emboldened when supply chain leaders outline the definition and criteria of an ideal supply partner. New technologies are expediting the way leading manufacturers are conducting supplier qualification, both in identifying new suppliers and maintaining their supply base. Turn inaccurate, inconsistent, or disconnected manual data into clean, consistent, and connected digital information.

Leverage a configurable business process-driven workflow to manage the full supplier lifecycle, including supplier self-service registration, supplier onboarding, information management, analysis, monitoring, collaboration, communication, and relationship management.

This agile supply chain approach will boost productivity and reduce costs in your supply chain while leaving more time for important strategic supplier meetings. Once suppliers are identified and qualified, effective supplier engagement tracking can convert suppliers to supply partners that will co-create value for your organization. Continuous dedication to identifying, qualifying, and engaging suppliers leads to enhanced commercial results and improved company performance in the short and long term.

About the Author

William Crane | IndustryStar

William Crane, CEO of IndustryStar, an Ann Arbor, Michigan-based on-demand supply chain services and software technology company that partners with leaders to reduce the cost, time and risk of bringing new product ideas to production and beyond. William is a trusted advisor in supply chain with demonstrated results starting, launching and enhancing procurement, logistics, supplier quality and manufacturing organizations.

His work has appeared frequently in the American Production and Inventory Control Society (APICS), Institute for Supply Management (ISM), Council of Supply Chain Management Professionals (CSCMP) and Sourcing Industry Group (SIG), among others. William’s passion for bringing technologies to market that have a positive impact on the world can be found via his blog Supply Chain for Tomorrow’s Technology.

William is also Host of the Supply Chain Innovation podcast where he interviews top industry change-makers to uncover strategies, tactics, and tools to expedite, optimize, and de-risk supply chain operations. William may be contacted at william.crane@industrystar.com.

 
 

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