Vendor Management Software is getting wider acceptance across various industries and verticals. The system can be integrated with the ERP/SAP system but not all data generated over the process are fit for use. Now, data input comes spread across a number of disparate systems that deal with supplier transaction, collaboration and planning. Not all supplier information is accessible, visible, structured and accurate. Therefore, there is a need for managing supplier lifecycle at various levels using an effective software, aimed to improve efficiency, resilience and reliability of the whole process.
Using Vendor Lifecycle Management System
Businesses need to adopt new tech to stay ahead and get more out of supplier relationships and streamline vendor lifecycle management. Supplier lifecycle management (SLM) is the end-to-end approach used to manage external vendors in an organized transparent and integrated method. The purpose is to recognize the value that suppliers can provide and to derive that value by placing them at the center of the ‘procurement strategy’ and process of the organization.
The vendor lifecycle management process integrates two important processes, namely, procure-to-pay and procure-to-contract. This is to leverage supplier data and for bringing together the procure-to-pay cycle and sourcing process. vendor lifecycle management is different from supplier relationship management and supplier information management.
Vendor Lifecycle Management comprises of the following
- Supplier identification process to identify potential suppliers through the solicitation process.
- Supplier selection and segmentation is next step to ensure that the supplier is capable of delivering. They are classified depending on a number of metrics.
- Supplier on-boarding is the process of adding a supplier to the approved vendor list, on a centralized database, to improve efficiency of the system.
- Supplier off-boarding from the vendor list is a process of removing the supplier rom the company’s administrative records at the end of a contract or otherwise.
- Supplier information management aims to gather information from every level of the supplier lifecycle. It extends to cover information related to risk management, contract performance, etc.
- Supplier performance management analyses the performance of a vendor over the contact period to address supplier risks using tools and benchmarks, scorecards and corrective action.
- Supplier risk management is the process of identifying, analyzing and mitigating risks in a supplier base by monitoring actively the existing vendor list. It helps to place a risk contingency plan to prevent supply chain disruption.
- Supplier relationship management identifies the most strategic suppliers to help develop a long-term relationship and best practices.
Ever evolving market conditions force organizations to face existing and upcoming challenges with a new approach. A recent study predicts that most organizations are planning to revamp the supplier lifecycle management process in the coming years in response to such challenges.
The ideal supplier VLM application can not only handle standard procurement challenges but also over a period of time cater to unique policies, processes and use cases. A vendor management system will help to satisfy the unique procurement needs and goals of businesses today and tomorrow.
Ready to Move Ahead.
Procurement best practices have integrated technology into supplier lifecycle management and are able to do more with less by adopting automation. The automated supplier lifecycle management system enhances engagement and transparency, lowers the chances of risks to sustain good supplier relationships. Take the next move to move ahead with advanced vendor lifecycle management tools and applications.
By using the vendor management software, one like Vendora- the vendor management software, your processes will be better organized and streamlined to meet challenges. Consider installing this versatile cloud hosted application to improve vendor workflow and procurement processes. Gain better productivity and reputation to boost your business turnover. Just contact us for your requirements.