It’s impractical and unrealistic to expect buyers to use a manual process for managing supplier information requests. Asking all of your suppliers to complete an anti-bribery or working conditions questionnaire by email and spreadsheets is not efficient and for organisations with thousands of suppliers it is impossible; the administrative overheads are too great. It’s why organisations typically focus on just the suppliers they knew well already but it means there are potentially many gaps in the supply chain which go unnoticed.
With an online process, there is no reason why you can’t ask everyone the same set of core compliance questions and then go deeper on those suppliers that are material to your organisation.
How can organisations prioritise their suppliers?
There may be a temptation to do everything with everyone but that's not necessary. It's about getting the right information from your suppliers, with the right level of detail. But in order to do that, you have to take a more strategic look at your suppliers and decide what's material and where the risk lies for your organisation.
For many organisations, supplier engagements are tactical rather than strategic. Organisations focus on the suppliers with which they spend the most money but this isn't necessarily the same as focusing on suppliers which present the most risk to your business. Sometimes there is a correlation between spend and risk, but spend isn’t always the right metric for assessing supplier risk.
Instead, consider the suppliers which are material to the product or service your organisation delivers. This can produce a different group of suppliers than simply the ones with which you spend the most money. Once organisations get high level visibility across all suppliers using an online tool, they are in a much better position to identify potential risks and undertake a more detailed analysis of suppliers which are material to the operation of the business.
Want to find out more about how you can use an online tool to focus on suppliers that really matter to you? Talk to us today.
[image credit: Mark Hunter]