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Common problems with suppliers

07 Mar

8 common problems with suppliers

Rupert Heather

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Making sure you have a consistent supply of the right goods, at the right time, in the right place is a challenge for any business.

The main reason is that each supplier has their own way of doing business, which you have to adapt to.

The goal is to utilise suppliers to drive down costs, improve profit margins and enhance product quality and flow. That means defining clear expectations of service and product quality and having a process to make sure they're upheld.

When buyers and suppliers work together they both benefit from operational efficiencies and can better achieve their objectives. 

We've put together a list of common problems with suppliers, so you can begin solving them. 

1. Sourcing the right suppliers

The difficulty of sourcing good quality new suppliers means relying on suppliers that have let you down in the past. You need visibility of reliability and any risks to appoint suppliers who fit your requirements.

Many buyers would like to add more suppliers but can’t manage the cost and complexity. Because some suppliers require a complex exchange of information, buyers may not have the systems in place to grow their supplier base.

2. Poor communication with suppliers

Information sharing is a key success factor in well managed supplier relationships.

Using technology to enhance supplier management creates mutual standards to ensure a consistent and reliable service. 

By having communication lines open and sharing clear expectations of service levels and performance standards, buyers can standardise collaboration with suppliers and prevent business disruptions.

Related: Manage more suppliers in an efficient, scalable and sustainable process

3. Staying up to date with compliance

Supplier portals provide a communication forum for buying organisation to improve supplier relationship and focus on improvement. This allows them to monitor quality and safety and identify non-compliant suppliers.

Mandatory quality and technical specifications must be tracked and maintained from all suppliers for compliance with procurement policies and KPIs.

4. Consistency of supply

To achieve a consistent supply of the right products at the right price, it’s vital to know which products have been ordered, when they are going to arrive and what the cost of ownership is.

Meeting the supply chain fundamentals of product availability, best price and speed requires both control and flexibility in supplier relationships.

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5. Lack of supply chain visibility

What many businesses lack, when it comes to gaining better supply chain visibility, is a system to rationalise how information is captured and distributed.

Vendor management systems provide clean data and accurate business intelligence to expose inadequacies in the supply chain and help spot potential gaps.

Poor visibility of the supply chain prevents companies from understanding risks, making improvements and building stronger trading capabilities.

6. Accurate product information

    It's vital to have access to information like:
  • Product names and descriptions
  • Supplier codes and buyer codes
  • Pricing information
  • Supplier and product availability
  • Allergen information
  • Promotion information

Any changes must be transparent so that customers always receive high-quality products and service. 

7. Getting reliable data 

To solve problems with suppliers and make better decisions, it's essential to gather intelligence and have accurate reporting across your business. It's a good idea to have a supplier service order report to view all suppliers and the service levels they are maintaining. 

8. Having a consistent process 

Some larger suppliers have complicated, integrated communications that are difficulty to engage with. At the other end of the scale, smaller suppliers could have limited back-office capabilities. 

From small artisan producers to multi-nationals with of thousands of products, the critical issue for buyers is standardising interactions with all suppliers to increase efficiencies and make doing business simpler. 

The focus of supply chain management is to deliver superior customer value at less cost to the supply chain as a whole. It’s achieved by creating cooperation and trust with suppliers.

Improving collaboration with suppliers is the key to streamlining procurement practices to lower costs, drive innovation and respond better to changing customer needs.

TradeHub:Buy from Celtrino is a supplier portal that helps companies manage their suppliers and source products faster, better and for less.

Are you interested in a solution to manage your suppliers? Contact us to find out more.