What are the challenges of supplier development?

The main challenges facing supplier relationship management teams today include ensuring quality, managing risk, fostering corporate social responsibility, meeting compliance requirements, and managing costs.
A multienterprise work management system brings structure to unstructured processes across supplier networks, and it can help pharma industry supplier relationship management overcome their biggest obstacles.
The best supplier relationship management teams are focused on working with suppliers to create competitive advantage—and multienterprise work management can help you ensure success.

January 29, 2021

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Here are the top 10 Challenges faced in any buyer-supplier relationship management and how they can be resolved:
1. Not Investigating Supplier’s Track Record
2. Overlooking Their Industry’s Business Culture
3. Communication Gap
4. Non-Transparency in Processes
5. Burdening the Already Over-Burdened Suppliers
6. Forgetting Relationship at the Time of Damaged Delivery
7. Inefficient Supplier Training
8. Avoiding The Need To Nurture
9. Disharmony in Buyer-Supplier Chain
10. Conflicts Over Contract
Find Answers to Your Most Asked Questions:
Q. What is the role of a supplier relationship manager?
Q. How do suppliers deal with poor performance?
Q. How do you challenge your partner in a good way?
Q. What are the most common problems in relationships?
Q. What are the four 4 sources of risk in procurement?

At pharma companies around the globe, supplier relationship management teams are key players on the forefront of efforts to build more agile, responsive, and resilient supply chains—and their roles and responsibilities are evolving fast.

When you’re with the right supply base and you have partners for your business, you should treat them as partners. You should trust them. You should make them part of your business.

The best supplier relationship management teams are driving business growth by working with suppliers to create competitive advantage, maximize value, reduce risks, and continually improve business processes.

Here’s a quick rundown of the top six challenges facing modern supplier relationship management professionals—and the types of digital capabilities that can help make you a supplier management rock star.

1. Ensuring quality
Today’s supplier relationship management teams are the first line of defense when it comes to ensuring quality. In addition to working with suppliers to ensure product quality standards are met, supplier relationship management teams continually work to identify and implement business process improvements that have a direct impact on operational efficiency and the bottom line.

Typical quality issues that supplier relationship management teams must contend with include boosting the efficiency of production management processes, avoiding defects like materials and packaging problems, and working to manage and reduce supplier incidents and issues.

2. Reducing risk
The risks that threaten to disrupt your supply chain are numerous and range from environmental and public health concerns like natural disasters and pandemics to geopolitical events like trade wars; business risks like raw materials shortages and price fluctuations; and operational risks like a lack of upstream supply chain visibility. The list goes on and on—and working with suppliers to successfully manage and mitigate risks is one of the most important responsibilities of modern supplier relationship management teams.

3. Fostering corporate social responsibility
From environmental stewardship to getting involved with the local community, companies across all industries are demonstrating a commitment to corporate social responsibility. As the use of outsourced services has skyrocketed and supplier networks have grown more complex, pharmaceutical companies have become increasingly dependent on partners for meeting corporate social responsibility objectives.

Much of the responsibility for meeting those goals—and ensuring that suppliers meet ethical, social, and environmental standards—falls on the supplier relationship management team.

4. Meeting compliance requirements
Working to ensure that suppliers meet regulatory requirements for things like pharmaceutical ingredients, environmental controls, and manufacturing standards is a major challenge facing supplier relationship management teams. Tracking compliance becomes even more difficult and complex when working with various suppliers in different countries. Ensuring close collaboration and coordination with suppliers and making sure service level agreements are met is a key responsibility.

5. Managing costs and creating business value
Procurement and supplier relationship management teams have always been concerned with getting the best deal possible from the business partners they select. In the past, that meant ensuring the lowest cost of transactions. Today, the focus is on maximizing the business value of every aspect of partnership, according to Nico Bac, a supplier relationship management expert and the founder of consulting firm Digital Procurement Now.

“There are still some price buyers out there sometimes, but especially in today's time, it's not a very smart approach,” said Bac, who was interviewed on a recent episode of TraceLink’s Agile Supply Chain Podcast. “There's all these other elements that are way more important than if a supplier gives you a three or five percent discount.”

6. Driving innovation
Today’s supplier relationship management teams are tasked with creating business innovation by working closely with suppliers on joint development projects that drive operational improvements. Establishing close relationships with the right partners is critical when it comes to maximizing business value and creating new kinds of competitive advantages.

“When you’re with the right supply base and you have partners for your business, you should treat them as partners. You should trust them. You should make them part of your business,” Bac explained. “There's many good examples [where] the ecosystem of suppliers is what made the supply chain unbeatable, either from a resiliency point of view, from an innovation point of view—whatever you're looking for.”

Supplier relationship management and the power of digitalization
Meeting the demands of modern supplier relationship management requires a digital network platform that helps your team and your entire supply network act as a single, cohesive unit—one that reduces or eliminates the need for disjointed manual supplier management processes and provides a clear picture of projects, accountabilities, and deadlines across all partner companies, people, and processes.

The answer is multienterprise work management—a new type of cloud-based application that enables you to digitalize shared work with your network of supply partners. Multienterprise work management allows supplier relationship management teams to create networks of internal team members and suppliers and bring them together in a single, virtual environment to collaboratively work on quality issues, risk reduction, process improvements and innovations, corporate social responsibility initiatives, and issue resolution.

Procurement teams are using multienterprise work management solutions to boost the performance of every supplier relationship management objective. With a multienterprise work management like Agile Process Teams from TraceLink, your supplier relationship management team can:

Improve Quality Digitalize multienterprise processes handled today with email and spreadsheets to improve the execution of production changes, quality defect resolutions, and supplier management issues.
Reduce Risk Capture risk incidents as they happen, classify them, and power joint decision making to mitigate risks.
Improve Compliance Digitalize change management, quality document exchange, and incident resolution to ensure products and processes comply with applicable regulations.
Enhance Corporate Social Responsibility Enable improvements in supplier communication and related corporate social responsibility processes to identify issues and manage corrective action.
Drive Down Costs Dramatically lower long-term costs through faster incident resolution, permanent reduction of recurring incidents, and joint innovation with your supplier network.
Power Innovation
As processes get digitalized and streamlined, the time to resolve incidents and execute changes shrinks, freeing up time for supplier relationship management teams to work with suppliers on innovation. Teams can also leverage collaboration capabilities to identify and drive process innovations.

Supplier networks are more complex than ever—and it’s time to move beyond phone calls, emails and spreadsheets and embrace new ways to work with supply partners to improve your ability to track supplier performance and efficiently manage work that spans multiple enterprises.

Multienterprise work management on a digital network platform enables you to overcome today's biggest supplier relationship management challenges and can boost the performance of your suppliers across the metrics that matter most to your business.

Learn more about Agile Process Teams today.

One of the most looked through-relationship in a business is the one you have with your vendors. For a business to deliver highly satisfactory services, it is important to have a streamlined workflow starting exactly from the vendors. Delays, gaps and miscommunications can lead to a subsequent pause in deliveries, hampering your overall business rapport.

While you can always keep a close eye on your in-house processes, dealing with third parties isn’t as easy. There are always some unknown gaps that your business has to come across on a day-to-day basis.

A business on average faces a regular delay of 48-72 hours while expecting shipments. But, the state of crisis occurs when the duration and frequency of delays increase.

The source of error resulting in conflicts could be anything. Understand and rectify the conflicts to their exact necessity to ensure smoother processes.

Here are the top 10 Challenges faced in any buyer-supplier relationship management and how they can be resolved:

1. Not Investigating Supplier’s Track Record

The first step to take before engaging with any supplier is to go through his past and current projects and to investigate his knowledge about tax and legal implications of exporting and importing. Knowing the supplier beforehand helps to create and build healthy relations.

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Also Read: Top 8 Ideas To Enhance Business Productivity without much effort

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2. Overlooking Their Industry’s Business Culture

Belonging to a different culture may give rise to different views and interpretations while having the same conversation.

3. Communication Gap

Communication is absolutely necessary for many aspects of the business. If a supplier doesn’t understand the company’s strategic goals that may fulfil the needs and requirements due to poor results. Maintaining good contact with the suppliers can benefit the organization in a big way.

4. Non-Transparency in Processes

Many times, the non-transparency of the supplier’s process creates gaps in the company-supplier relationship. Technology can play a crucial role to fill this gap. Analyze the whole process more efficient by using an online purchase order and invoice management tool like Invoicera.

5. Burdening the Already Over-Burdened Suppliers

Suppliers deal with many organizations at once. Often the order is delivered late by the supplier because of the unavailability of the product. These types of late deliveries can weaken the relationship. Forecasting the requirements of the company can help in running the SRM process smoothly.

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Related post: Buyer-Supplier Relationship Management Best Practices

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6. Forgetting Relationship at the Time of Damaged Delivery

At times, the delivered product turns out to be damaged or flawed. Aggressive steps at such times can ruin a relationship. One should notify the supplier respectfully and ask him to replace it. A healthy balance is maintained while taking steps against suppliers who are underperforming. A healthy balance manages underperforming suppliers.

7. Inefficient Supplier Training

If the supplier doesn’t understand, what the company wants its customers to experience through their products, he won’t be able to provide enough supplies. One should make sure that the supplier knows the company’s motto. They should be given appropriate training to ensure expectation levels.

Create a comprehensive knowledge base that can train your suppliers on each of your different processes. If you are a corporate with a huge network of suppliers, you may also consider setting up a website exclusively for suppliers to learn the processes and coordinate with your internal teams for supplies. It doesn’t cost a lot to set up such a platform with the help of website builder tools.

8. Avoiding The Need To Nurture

A healthy relation only nurtures when the two sides stay together for long.

Abandoning the suppliers at the time of success may create stress in a relationship. To avert this, one should include the supplier at every milestone and success celebration of a company.

9. Disharmony in Buyer-Supplier Chain

In a time without recognition and encouragement, the supplier becomes disloyal to an organization. Changing the supplier is not the solution here as it will consume more time and money. One can gain the loyalty of a supplier by encouraging him, or perhaps, offering incentives if possible.

10. Conflicts Over Contract

Signing a biased contract can be very unpleasant for the supplier. One should make sure that the contract has benefits for both the sides. A contract must be reviewed very carefully before it gets finalized.

Many organizations are now realizing the importance of Buyer-Supplier Relationship Management. Efforts have to made on a continuous basis to build harmonious Buyer-supplier relationships. SRM is a long-term approach to sustained success.

Invoicera is an Online Invoicing Tool that Provides a Host of Features to Effectively Manage Buyer-Supplier Relationships:

Invoicera offers an array of features to ensure the convenience of management and precision with data. Now, no more hustling around and wasting your precious time with little executions that can be automated easily.

Send and Schedule Invoices to the buyers on time.
Buyers can send purchase orders in a timely manner.
Suppliers can send in estimates for buyer approval.
In the case of a price settlement, the buyer can send inappropriate credit not.
The buyer can get a free log-in to access all invoices and account statements online.

Opt for Invoicera to manage your account payable and receivable effectively. Keep a record of all your finances and invoices together in cloud-based accounting software. FREE SIGN UP.

Find Answers to Your Most Asked Questions:

Q. What is the role of a supplier relationship manager?

A. A supplier relationship manager ensures that purchase orders are sent in time, payments are released as per dates, and all the grievances of the suppliers are addressed and resolved in time. In a nutshell, he ensures a smooth incoming of raw material and functioning.

Q. How do suppliers deal with poor performance?

A. Communication is the key to resolve any problem. If you’re facing an issue with your suppliers, communicate the matter to them, hold meetings, or ultimately for unresolvable issues take desired actions as per your policies.

Q. How do you challenge your partner in a good way?

A. In order to challenge your partner in a good way push them to their caliber limits. Don’t abandon them without work. Constantly keep working to attain goals that you’ve planned for your business and make them a part of it.