The Impact of Supplier Identification
In a recent survey conducted at a ProcureCon Biotech and Pharma conference, over 80% of procurement professionals indicated that it takes as long as one to six weeks or more to identify qualified suppliers before initiating an RFP. During a recent roundtable meeting, procurement leaders challenged this data, suggesting that it takes even longer to find suppliers in new product/service categories being researched.
Although there are many sources of supplier intelligence (databases, trade publications, the Internet, peers, etc.), these resources can be expensive and difficult to assess based on multiple subjective factors.
It also takes a considerable amount of time to gather and filter through the information required to properly identify suppliers. Meanwhile, most of procurement’s internal partners are looking for immediate supplier recommendations and compressed timelines so they can quickly find the right supply partner and meet their business goals.
So what is the impact of a lengthy supplier identification process?
1) The Cost of Relationships:
If it takes weeks to present qualified suppliers to internal partners, it make shake their confidence that procurement is not knowledgeable enough about the supplier landscape to meet their needs. As a result, some will initiate due diligence on their own and ignore supplier recommendations from the procurement team. Duplication of efforts and loss of trust are counterproductive and can negatively impact future internal collaboration opportunities.
2) The Cost of Doing More:
Research is time consuming and forces resource strapped procurement teams to constrain their efforts to high risk/critical supplier needs. Many searches go unsupported because procurement doesn’t have the time to support them. If procurement does manage to communicate their value in this area, it is too often followed by an influx of requests that are difficult to turn down and impossible to support. Time consuming processes prevent procurement from scaling their impact across numerous initiatives and building valuable internal partnerships.
3) The Cost of Strategic Thinking:
Due diligence requires procurement to invest hours in tactical research. Leadership teams are look to procurement to develop strategies that will impact the top and bottom lines, such as process optimization, efficient team structure, and the introduction of innovative tools and solutions. If procurement is weighted down by tactical work, it comes at the cost of being able to take a step back, collaborate with internal teams, and deliver strategies that will impact the success of the organization.
New technologies such as tealbook give procurement teams the ability to identify qualified suppliers instantly. Moving from weeks of due diligence to instant supplier identification helps organizations increase efficiencies and lower costs far beyond the obvious financial value associated with traditional methods.
I welcome your thoughts on the cost of the supplier identification process. ProcureCon will soon be publishing a Whitepaper that touches upon this topic as well as other valuable findings from the same survey – Improving Strategic Supplier Identification through Technology.
tealbook is the only online comprehensive supplier knowledge management platform. tealbook contains up-to-date, credible supplier information so teams can instantly identify the best suppliers for each specific need and collaborate with stakeholders on supplier information and searches. tealbook is easy to implement, use, and integrate with your other tools and systems.
tealbook is your team’s trusted source for actionable supplier intelligence. For more information, visit tealbook.com