There are several benefits of using a supplier relationship management solution. It essentially offers a platform to manage your suppliers more effectively by providing 360-degree information throughout the entire lifecycle from onboarding to enabling seamless collaboration to building strong relationships as well as for taking corrective actions if required. Some of the major benefits of using and SRM solution for managing suppliers are:
- Transparency: A Supplier Relationship Management Solution (SRM) consolidates all critical information and data regarding your suppliers in a single place. It will allow you to have increased visibility into the number and type of engaged suppliers, their performance, etc. to develop your supplier strategies, from a single platform.
- Efficiency: SRM systems help make your sourcing operations more efficient by minimizing the time and effort required to manage a supply chain by automating processes and helping in vendor consolidation.
- Collaboration: SRM system can help you develop a transparent relationship with your suppliers through regular communication and result in long-term strategic partnerships offering several benefits including cost benefits.
- Decision-making: SRM solutions improve forecasting and decision-making by offering a deeper knowledge of what your suppliers are capable of.
- Supplier Quality: An effective SRM solution has capabilities of detecting issues in supplier relations, generating reports on performance, etc. to identify quality suppliers and develop them or blacklist non-performing suppliers to ensure a quality supply base.
- Supplier Compliance: Using supplier management software allows you to track suppliers’ compliance and ensure they meet the compliance regulations of your organization as well as standard compliance requirements.
- Supplier Performance Evaluation and Monitoring: A Supplier Relationship Management software allows you to evaluate supplier performance easily using various tools like ratings, scorecards, etc., and evaluate and monitor KPIs like On-time Delivery, Quality of Delivery, Order Accuracy, etc.
- Risk Management: Identifying and mitigating supplier risk is another critical benefit of having efficient supplier management solution. It helps in identifying and assessing the impact of the supplier risks and devising appropriate risk mitigation measures.