In supplier data management, inefficiencies slowly build up, and what was once a minor inconvenience can quickly become a major problem if left unchecked. Out-of-date processes and manual data management hide risks and liabilities which could have been otherwise easily avoided.
The pressure is on for most organisations to clean up process and tighten any loose parts in the name of efficiency. With a renewed focus on lean, agile teams in the wake of a technological evolutionary jump, it makes sense.
What is Supplier Data Management?
It’s the practise of collecting, maintaining, and governing data related to suppliers. This could be details such as compliance certifications, risk profiles, performance metrics, and much more. A successful supplier data management strategy ensures that all supplier information is accurate, consistent, and accessible across organisations.
This enables better decision-making and operational efficiency. It supports stronger supplier relationships across multiple organisational departments. It protects the organisation from risks.
The Cost of Bad Supplier Data
Bad data can hide in plain sight. Duplicate entries, out-of-date contact details, missing certificates proving compliance – they all impact the integrity of supplier data. These inaccuracies and gaps in the data accumulate to create costly problems.
Slower Processes
Teams can waste hours chasing down a missing certificate or verifying that the saved details are correct. With siloed supplier data management, data can be saved in varying states of accuracy across multiple systems, making it more tedious to keep track of.
Compliance Risks
In highly regulated industries, issues of non-compliance can spell devastating risks to reputation. If the basics of compliance, such as tracking certifications, are not watertight then organisations risk violating trading terms or ESG commitments.
Supply Chain Disruption
The effects of poor supplier data management can ripple out throughout an entire supply chain, causing major disruptions if left unchecked. Even data as mundane as supplier contact information, if incorrect, can leave teams scrambling if they need to communicate issues to a supplier.
Financial Losses
Bad data creates opportunity for oversight, and poor visibility over important supplier data such as contracts can have a direct impact on finances. Negotiation opportunities and renewal dates can easily pass by without warning, leaving money on the table.
Strategic Blind Spots
Aside from purely financial, there are strategic risks when relying on poor quality supplier data as well. Without a clear understanding of supplier performance, there are inevitably opportunities for business and supplier development which will go unexplored, closing off lucrative prospects.
So, How Do You Improve Supplier Data Management?
Investing in a fit-for-purpose supplier data management solution can pay for itself many times over. Here’s what to look for:
- Centralised supplier records, for a single source of truth consolidated from across departments.
- Automated due diligence, as in, duplicate record detection, automatic accreditation validation, and flagged missing data.
- Compliance & risk monitoring baked in, so that you can trust the data you rely on to make critical business decisions.
- Configurability and flexibility, so that your processes and policies are adhered to, rather than changing process for a one-size-fits-all solution.
- Security as standard, so a solution deeply embedded with data encryption and compliant with GDPR and ISO 27001.
- Reliability and accessibility are key features of any solution worth its salt.
- Performance monitoring, and the ability to visualise data in engaging ways in order to draw patterns, trends, and analyse drifts or movements.
The ROI is clear: better supplier relationships, stronger compliance, and more strategic decisions and operations.
The cost of bad supplier data management can be severe, but the good news is that there are systems and processes which can support better management of supplier data, such as ARCUS® Supplier Management Software.
