Top 3 Steps to Elevate Supplier Communications
By Steve Norris, Director Supply Chain Collaboration, TrueCommerce, Inc.
As a manufacturer, the quality of your communications with suppliers is arguably as important as your communication with customers, as both are equally critical to your business success. In fact, as markets become increasingly consumer-driven and globalized, the need to continuously improve on cost, speed, quality and operational agility makes your supplier relationships more significant than ever before.
The last thing you want in today’s omni-channel world is a stagnant supply chain where nobody’s talking. Improving supplier communications is sure to yield positive results, from reduced shipping errors to fewer stockouts to more on-time deliveries to better performance against sales targets. Not to mention less stress!
How best to make that happen? Here are the top three steps to improve the consistency, timeliness, quality and value of communication between your business and its suppliers:
Step 1: Create a clear, consistent communication plan that includes all your suppliers, from the largest to the smallest.
To drive decisions across your supply chain, you need visibility into your entire supplier base, not just the big guys. Likewise, you need consistency in your reporting and supplier performance management processes. Otherwise efficiency and effectiveness will suffer, and issues will continue to rise up and bite you because you didn’t see them coming.
Whether you’re onboarding a new supplier or going over new ground rules with a long-time partner, clarity is critical. Set understandable expectations that spell out what data you need from suppliers, what form you need it in and the options for transmitting it.
An automated, unified platform that can meet the needs of both large and small suppliers is the foundation for establishing and maintaining dependable communications. These features are key:
- Because it’s universally accessible and minimizes IT demands, a cloud-based solution is ideal.
- Ease of use and quick onboarding are essential; otherwise you’ll face stiff resistance to adoption.
- All parties need access to all relevant data in one centralized place—not only for simplicity, but also to facilitate tracking and aggregating data across suppliers for analysis and reporting.
- When it comes to connectivity options, one size does not fit all. Larger suppliers may already be using electronic data interchange (EDI) to connect digitally with you. Many smaller suppliers will most readily embrace a web-based portal to submit data and documents. Other formats you may need to support include XML, CSV and application-specific formats (e.g., SAP or Microsoft Dynamics).
Step 2: Establish real-time visibility to relevant and validated data.
Incomplete, incorrect or outdated data pertaining to orders, fulfillment, inventory, products or contacts is the bane of supply chain performance. To drive processes (e.g., “endless aisle” or drop-shipping services), answer questions and resolve issues you need complete, relevant, validated and current data from all your suppliers.
How do you get there? Best-practice approaches that will improve communication and efficiency right from the start include:
- Standardize your existing data.
- Implement data quality rules and validation services as part of the data acquisition process through your communications platform. This will weed out errors while ensuring each data exchange is complete and valid.
- Give suppliers a self-service portal or other simple method to update their own product, contact and company data. This saves everyone time and improves data quality.
- Integrate, don’t duplicate. Manually entering the same data across multiple systems wastes time and money, numbs brains and decreases data quality. Do everything possible to automate data interchange using standardized formats and APIs.
Step 3: Track supplier performance through dashboards and scorecards.
Through steps 1 and 2 you’ve set clear expectations for what data you need from suppliers, and ensured that data delivers maximum supply chain value. The third and final step is to leverage all that wonderful data to track (and improve!) supplier performance using dashboards and scorecards.
While dashboards are perfect for displaying current data and trends, standardized scorecards are great for tracking and communicating performance metrics to suppliers on an ongoing basis. Here again, it’s ideal if you can leverage your communication platform for data analysis and distribution, versus exporting data into another system and potentially creating redundancy, complexity and timeliness issues. Another benefit of keeping all your supplier data in one system is the potential to create an alerting function to proactively address issues before they impact your business or its customers.
What data do you need to report to executives and suppliers? Every manufacturing business has unique requirements, but these are some of the success metrics most companies will want to track:
- On-time fulfillment/delivery performance
- In-full performance
- Compliance performance
Be sure to apply the same assessment criteria to all suppliers, and to track and report on performance consistently (e.g., monthly or quarterly). Use quantitative rather than qualitative parameters, which tend to be arbitrary. If your communication platform can automatically log and file reports for easy reference and ongoing analysis, so much the better.
If you’re able to set clear expectations for suppliers, keep your data clean and track performance consistently as just described, you’re sure to elevate not just your supply chain communications, but your bottom line and competitive position.
Of course, communications always flow better when there is trust between the parties involved. Making changes and sharing lessons learned with a partnership/collaboration oriented mindset rather than an “audit/compliance” focus will smooth the adoption process and strengthen some of your most important business relationships.
Steve Norris, Director Supply Chain Collaboration, TrueCommerce, Inc.
- 16+ years of Supply Chain Management Solutions | TrueCommerce
- Certified Project Management Professional
- Supply Chain Collaboration Master