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4 Steps to Make Supplier Performance Management Work for you

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Why is Supplier Performance Management important? Supplier performance management is important for a number of reasons: It helps ensure that goods and services are delivered on time and meet quality standards. This is especially important in industries where timely delivery and high quality are crucial, such as in the manufacturing or healthcare sectors. It allows organizations to identify and address issues or problems with their suppliers before they have a negative impact on the business. This can help prevent delays, reduce costs, and improve overall efficiency. It helps organizations make better-informed decisions about their supplier relationships. By tracking and analyzing supplier performance data, organizations can determine which suppliers are the most reliable and cost-effective, and prioritize their relationships accordingly. It can help organizations build stronger relationships with their suppliers. By working closely with suppliers to understand and address their needs,
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Why Suppliers Should Not Fear Reverse Auctions

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  Reverse auctions are a great tool for buyers to save money, but many suppliers tend to be apprehensive about participating in them. Suppliers do not like participating in reverse auctions because they are typically viewed as a race to the bottom in terms of pricing.  There are more apprehensions which we will articulate in this article. We will also take a look at the remedial measures a buyer must take to ensure auctions are competitive and the best bid is placed by the most capable supplier. Understand suppliers’ apprehensions about participating in reverse auctions When it comes to participating in a reverse auction, suppliers are wary about who else will be in the pool of participating vendors. Suppliers fear that they will be pitted against unqualified or inexperienced vendors who will try to undercut their prices, compromising the quality of the product or service. Incumbent suppliers may also worry about the fairness of the auction. They may feel that their knowledge of the bu
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How to Achieve Success with Strategic Sourcing: Top Best Practices

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  How do you achieve success with strategic sourcing? What do you need to do to be successful with strategic cost reduction? This article outlines some of the best practices on how to effectively perform strategic sourcing, so you can achieve your goal of lowering your costs without sacrificing the quality or reliability of your supply chain. What is Strategic Sourcing? Strategic sourcing is a process used by organizations to identify and secure the best possible channels of supply for their goods and services. It involves analyzing, negotiating, and managing all aspects of the procurement process, from product selection to delivery. The goal of strategic sourcing is to maximize business value and savings by reducing costs, increasing efficiency, and improving supplier relationships. The success of strategic sourcing requires a joint strategy between the buyer and supplier. This entails a comprehensive analysis of the buyer’s strategic spend – what they spend money on and how much they
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How To Build Credibility With Suppliers For Your Eprocurement Initiative

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  It is up to the buyers to enforce practices in their sourcing process that build trust with suppliers. These practices assume greater importance when companies resort to eProcurement. Companies that have been successful in building a credible eSourcing initiative tend to adopt the following practices. These practices have been shown to encourage suppliers to participate in a fair and competitive manner. Buyers agree to the following steps that establish credibility Detail out the requirements clearly. While the incumbent suppliers understand even the unstated requirements, the new ones wholly rely on the RFP for clarity. So explain the specifications and service level expectations as clearly as possible. Award only to the suppliers who bid online. Manage suppliers who don’t like to bid online with great urgency and importance. A handful of such suppliers can derail the entire  eSourcing platform   initiative. If lots (containing multiple line items) have been created and suppliers ar
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What Is An RFP And Why Is It Important To Digitalize It?

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  What is an RFP? A Request for Proposal (RFP) represents a document or a sourcing stage where proposals are solicited from suppliers or solution providers. The Buyer uses the RFP to state the requirements of the goods or service being procured, the terms and conditions of the engagement, the vendor evaluation criteria, and most importantly the bidding sheet. This bid sheet outlines the quantum of goods or services and suppliers need to quote the price for the same. RFPs apply to all types of spend – indirect, direct and capex. Every sourcing process needs an RFP in some form or other; with varying complexity depending on the nature of the item being sourced. 3 key aspects of an RFP that underline its importance 1. RFPs precede the ‘negotiate & award’ stage and hence need to be managed from that perspective An RFP is followed by a negotiation process after which the business is usually awarded to the most competitive supplier in terms of price, capability and service. In an online
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6 Reasons Why Reverse Auctions Fail to Deliver the Desired Results

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  Reason 1: Inviting unqualified suppliers to the auction event Auctions should immaculately be the final step in the negotiation process. Negotiating with suppliers post the auction is a big no-no. Also, qualifying suppliers post the auction has its drawbacks too. Assume the smallest-ranked supplier is disqualified post the transaction. The coming ranked supplier will misdoubt the veracity of the event and will probably be irritated. Reason 2: Poor supplier management Suppliers would much rather fight in a transparent and fair market, where their capabilities can be fairly estimated. They prefer to join the auctions with capable suppliers. They doubt an unclear selection and shortlisting process. Having a simple auction tool is critical to ensure suppliers aren’t discouraged from joining online auctions. Some common supplier queries are the following: Why is the buyer even conducting  reverse auction sourcing ? We’ve serviced them well over the times and delivered good value, so why t
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