Many organizations continue to face challenges associated with an uncertain economic environment. Appropriately, leaders are assessing opportunities for greater efficiency and cost savings. For procurement teams, that means heavily auditing their ProcureTech stack and existing supplier relationships.
Leaders should consider budget line items holistically and remember that agile re-positioning benefits organizations more than wholesale cuts. For example, would it be wiser to cut ties with a supplier altogether or re-negotiate an advantageous contract that allows you to continue meeting high consumer demand?
The latter option seems more appealing, yet insufficient visibility into vendor costs prohibits many organizations from adequately controlling their own supplier spending. With low supplier visibility, procurement leaders are more likely to misunderstand line-item costs, making it far more difficult to negotiate favorable terms and prices. Worse, organizations lacking supplier visibility miss opportunities to consolidate spending or optimize sourcing processes.
Simply put: A modern ProcureTech stack is incomplete without solutions driving supplier visibility. Let’s discuss the critical importance of heightened visibility and how modern enterprises can realize true supplier transparency.
Using a supplier data platform to centralize and optimize
Manual entry processes, lack of access to consistent data sources and generalized data quality issues hold many procurement teams back. And low supplier visibility exacerbates these problems.
TealBook research found that nearly two in three sourcing leaders (64%) view having a supplier data foundation as the solution to extended sourcing timelines and weak supplier data, particularly during crises. More than half of respondents also believe a supplier data foundation provides beneficial real-time analytics and market opportunities.
Additionally, a supplier data foundation can be an incredible resource for increasing supplier visibility. Why? Because supplier data foundations, like TealBook’s Supplier Data Platform (SDP) provide a centralized database of highly accurate and up-to-date supplier information. SDP monitors supplier performance and eases the contract management process by automatically compiling relevant information when filling out tedious contracts or requests for proposal (RFPs).
TealBook’s SDP also provides visibility into a supplier’s certifications — official and otherwise — as well as their pricing structure and inventory numbers. Access to this information allows leaders to negotiate (or re-negotiate) with confidence.
Unlocking vital insights through data analytics
Leaders who leverage data analytics tools gain insight into supplier performance, enabling them to identify areas for optimization. For example, organizations can use data-backed insights to analyze supplier spend patterns and identify opportunities for more advantageous negotiations. Vendor performance metrics are a critical piece of this puzzle, as they reveal cost-saving opportunities — as well as potential risk factors, like a supplier’s regulatory compliance issues or financial instability.
Overall, data analytics is a key part of understanding your vendors’ costs. A Statista survey of chief procurement officers (CPOs) found that more than half of data-mining initiatives in procurement (57%) aim to improve the negotiation process, while 40% aim to optimize supplier portfolios generally.
According to McKinsey, global companies can accelerate their sourcing by 30% by implementing a supplier data foundation offering actionable insights and prescriptive analytics. The key to achieving this success? Adopt a data foundation featuring visualization tools. User dashboards, for instance, are handy because they provide comprehensive information about supplier performance, including each supplier’s pricing evolution, gaps between actual and theoretical spending and the impact of each supplier’s contract on total procurement spending.
TealBook’s Supplier Data Platform meets and exceeds these best practices by providing users with suggestions on how to improve their downstream sourcing footprint, which is determined by their tier-two and tier-three suppliers. With these insights, technicians can easily compile full reports and meet broader organizational goals concerning spend management and DEI.
Make your data work for you
Don’t be alarmed if you lack visibility into your tier-three and tier-two suppliers — or even your tier-one suppliers. According to Gartner, only 21% of supply chain leaders cite no issues with supply chain visibility. Clearly, the industry would benefit from real-time analytics and up-to-date supplier data.
Ready to become part of the 21% of supply chain leaders confident in their supplier visibility? TealBook has you covered. Click here to get started today.
