Supplier and service management: what it is and how to do it

As a company begins to grow, the volume of suppliers generally increases by the same amount. And knowing how to manage suppliers is essential in order to deliver quality products. Therefore, it is important, first of all, to know what it is and how to manage suppliers. Such a concern can directly interfere with an organization’s costs and thus the profits (or losses) it generates.

The vast majority of companies depend on suppliers to produce or sell their products to consumers. Even a very independent industry, which manufactures everything from packaging to the product that goes into it, for example, needs raw material suppliers.

This dynamic, almost mandatory in the market, demands from managers a great ability to manage all their suppliers, evaluate them and decide if the contracts are being fair and profitable. In this article you will know, step by step, what are the main requirements and tools to carry out this important management.

What you will find in this article:
How to choose a good supplier?
Consequences of not evaluating your suppliers
What does the software do for you?
Why choose software to manage suppliers?
Benefits and features
Conclusion 

How to choose a good supplier?

Despite being a particular process for each company, the choice of good suppliers can start according to four criteria, which are the main pillars of supplier or service management. They are: price, delivery times, payment terms and quality of service.

As is customary in several organizations, the management of suppliers and services generally begins to be structured in Excel tables. This tool, which at the beginning helps to organize the management of a company, over time becomes a real challenge, since it does not have features capable of integrating and compiling data from several tables in one place.

For this reason, throughout their growth, companies are faced with the important decision to invest in more complete and modern softwares that simplifies and automates almost all this work. Depending on how many suppliers your company works with, doing this task manually can be endless in addition to, of course, wasting valuable time from managers, who could be focused on other company expansion projects.

A simple example is a non-governmental organization that uses Interact’s supplier management software. When data collection started, more than 120 suppliers were mapped in the new system. All this in an NGO. Now imagine what this scenario looks like in a larger company, for profit purposes. This list of suppliers can reach thousands, as is the case with several hospitals with which Interact works.

Consequences of not evaluating your suppliers

In the rush of everyday life, many managers can only distinguish as good or bad those suppliers who have already generated remarkable experiences, such as very different price and quality or a bad experience, which has led to stress and breaking contracts.

Working on extremes can hide serious data about the progress of a business and, consequently, its survival in the business world. Therefore, finding the balance of all factors is always the safest way for an organization.

Not evaluating your suppliers and contracts, puts your company at serious risk of wasting resources that could be crucial for your growth

This path, by the way, can be shortened based on real and updated data, generated by your own company when using supplier management software, such as SA Service Manager . It allows a more realistic view of each supplier and contract, avoiding investments with little return or losses.

What does the software do for you?

In this type of tool, it’s possible to create several requirements that are relevant to your organization, with checklists in order to facilitate the effective management of services, suppliers and company contracts.

In summary, to decide which suppliers are best for your business, you need to determine which factors, in an ideal world, would weigh the most for that choice. After defining what these requirements are, you must put them in order of importance and assign a grade to each one.

This way, it is possible to more easily determine the importance of these items and the impact they cause. Then, based on the requirements you have defined, the software will give you the score for each supplier and a list of those that can generate the most successful business. This bigger job at the beginning, of setting factors, then becomes automatic in your organization’s processes, making your choices increasingly secure, based on transparent data.

Why choose software to manage suppliers?

In addition to offering the possibility to choose which requirements you want to evaluate, SA Service Manager also manages and monitors all stages of each contracted job, including the period when your company is still deciding which candidate to choose as a supplier.

The software also compiles, according to your requirements, which are the best suppliers, placing them in a ranking according to each category you define. Another great advantage of investing in technology to manage your suppliers is the possibility of monitoring each budget and contract separately, using search filters.

Extra content: Practical guide “How to apply quality management in my organization?

Benefits and features

The functionalities of the tool range from registration and assessment of supplier qualification to the maintenance of signed contracts. With it, it is possible to periodically evaluate the performance and monitor the quality of the services provided.

In addition, software for managing suppliers, contracts and services provided leads your company to reduce operating expenses, organize data giving you more control over each activity and, among other things, builds a solid structure of qualified suppliers, with their respective documents and deadlines. Much easier, isn’t it? Here are some other benefits:

  • – Contract Management: create contracts that have information about services and suppliers. This way, you centralize and organize the data, facilitating the management of all services.
  • Performance Evaluation: the software allows the creation of personalized checklists for the qualification and performance evaluations of both suppliers and contracts.
  • Supplier Ranking: establish a scale of values and consolidate your assessments. These scales are linked to the questions in a checklist and will assist in automating the evaluation result.
  • Control of Clauses: the contract can be registered with general information such as date, values, negotiation and inclusion of clauses of what you want to contract. These clauses are inserted in the contract in the form of topics, which facilitates control.
  • Life Cycle of Contracts: all contracts and their requirements have life cycles. Through their expiration date, it is possible to control their status. You can extend the date or discontinue them when due, as needed.
  • Financial: for each contract created, it is possible to manage your financial. This allows to detail and monitor the number of launches and approval of payments, allowing greater control of payments to suppliers.
  • Calendar Alerts: have a calendar with alerts to remind each user about their pending items for verification. They can be performance appraisals, contract and supplier qualifications, billing pending issues or financial launches.

Conclusion

With all your suppliers, contracts and services under control, you will have more time to relax and come up with brilliant new ideas ?

In this article you learned that the management of suppliers, contracts and services needs to follow a series of rules to ensure the financial health and quality of your organization’s services or products. The text also brought a reflection on Excel spreadsheets, which despite helping their processes in the beginning, later become a real challenge for the organization of a company’s data.

Based on the large number of suppliers that a business may have, reaching the thousands (such as supermarkets, hospitals and multi-brand stores), the management of suppliers and their respective services and contracts only becomes viable, transparent and truly profitable with the assistance of specialized software in the subject, such as Interact’s SA Service Manager.

Therefore, if your company is finding it difficult to manage all the requirements to choose its suppliers, then this is the case of knowing more about these technological tools that, in addition to helping on a daily basis, promote more security and profitability at the time of close deals.

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