Ariba Offers Tips for Effectively Managing Suppliers
Company to Outline Ways in Which Technology and Best Practices Can Strengthen Supplier Relationships and Reduce Risk During March 19 Lunch Box Webinar
SUNNYVALE, Calif.--While it is no secret that the success of today’s enterprise depends increasingly on its strategic use of a well-managed supply chain, many organizations are still lacking in their management of a key link in that chain – the supplier. Simply put, many companies are unable to accurately assess and maximize the performance of their suppliers and as a result, they are missing opportunities to boost profits and mitigate risk. On March 19, Ariba, Inc. (NASDAQ:ARBA), the leading spend management solutions provider, will host a webinar to outline ways in which procurement professionals can leverage technology and best practices to design and implement successful Supplier Performance Management (SPM) programs that ensure the health and efficiency of their supply chains. A part of the Ariba Lunch Box Webinar Series, the interactive sessions will take place at noon during each of the Eastern, Central and Pacific timezones.
“The supply chains of most companies today have one glaring trait in common: uncertainty,” said Andy Rubinson, Sourcing Solutions Marketing Manager, Ariba. “In order to take charge of their market success, companies must effectively collaborate with and manage their suppliers around the world. And this means establishing and tracking performance standards and instilling processes to drive continuous improvements.”
With the right Supplier Performance Management solution, companies can define, measure, and enhance supplier performance to meet their business goals. In addition to dramatically improving supplier on-time delivery and fill rates, SPM can also boost revenue by freeing up resources for core functions that more directly impact the bottom line.
During the webcast, Ariba will outline several steps that companies can take to design and execute SPM programs that help them achieve these results, including:
1. Know your end game
Then set metrics only for the elements that bring you there. Without the right Key Performance Indicators (KPIs), supplier performance can’t accurately be measured.
2. Face facts
This may require some sensitive change management tactics. It is important that employees understand that SPM provides a more accurate assessment than their history with a supplier. For best results, hold your key performance indicators steady for 12 to 18 months. Otherwise, you risk frustrating employees and alienating suppliers.
3. Be firm
Ensure that suppliers understand your program, its goals and benefits before implementing it. Be clear that your company will enforce corrective action for problem areas, and that there will be consequences for suppliers that don't take action to improve on them.
4. Work with (not on) suppliers
Involve suppliers in the process whenever possible in a truly collaborative way. Some companies get better results when suppliers are allowed to rate themselves.
5. Automate wherever possible
Look for SPM solutions that automate surveying and scorecard functions to minimize required resources. SPM solutions also exist that capture supplier data in a single repository, rather than disparate systems. The most effective solutions use process workflow to ensure users follow consistent processes and involve the right stakeholders. On-demand solutions are one cost-efficient option.
6. Drive ongoing improvement, reset metrics
The output of the last performance review and its subsequent action plan should be the foundation for a supplier's next review period. As the top-level strategic goals of your organization change, so should the top-level criteria against which you measure your suppliers.
7. Assign SPM owners
Implementing SPM requires assigning owners to manage certain suppliers. While SPM is a centrally managed practice, it requires decentralized execution. At the end of the day, your business unit managers are the ones running the scorecards. Train SPM owners not only on any software you may be using to drive your program, but the methodology behind it as well.
While SPM will not eliminate risk, organizations can minimize it by working with suppliers to increase their efficiencies and jointly identify potential trouble spots that could lead to problems down the line. To learn more about solutions and processes that can help your organization better manage its supply chain, register today for the Ariba Supplier Performance Management Lunch Box Webinar webinar at: www.ariba.com/go/lunchbox
About Ariba, Inc.
Ariba, Inc. is the leading provider of spend management solutions to help companies realize rapid and sustainable bottom line results. Successful companies around the world in every industry use Ariba Spend Management™ software and services. Ariba can be contacted in the U.S. at 1.650.390.1000 or at www.ariba.com.
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