Evaluate and Control Supplier Performance with Vendor Management Software

If you want to meet the demand of the customer in the most cost-effective and efficient manner, supply chain management is the answer. In theory, it’s quite clear-cut—the premeditated movement of products from factory, to warehouse, to retail outlet, to customer. But in real world, it’s extremely complex. This chain is only one probable variation among many diverse supply chain structures; each poses its own distinctive challenges.

In such scenarios, organizations often find it hard to monitor the performance of the supply chain. Here comes the role of vendor management software. It is designed to assess supplier’s performance with the purpose of improving it and eliminating business risk. The risks we refer here are things that harmfully affect business such as on time delivery, cost, communication and non-conformity just to name a few.

Evaluating performance and managing expectations

The customer with the conformity of their suppliers determines the lowest levels of satisfactory performance. This may be outlined in purchase orders, throughout negotiations or contracts. The criteria are then listed as part of the system setup. Next is a points system that segregates intolerable performance from outstanding performance and everything in between.

At the time of evaluation, raw data is entered manually or dragged in from ERP systems. If raw data seem impractical, then points are entered. For example: Supplier A is rewarded with 8 points out of 10 for on-time delivery. Obviously, this procedure is much more one-sided than entering raw data. VMS needs to be flexible and easy to configure so that you can easily distinguish the disparity between suppliers that ship several thousand of units every week vs. suppliers that may only one or two times in 6 month. Assessments and schedule should be as unique as the suppliers themselves.

The outcomes of evaluation once it is completed can be communicated in every level of the organization and to the suppliers in several ways. Advanced vendor management systems converse straight to supplier by means of secure supplier portals. Systems like these meet the requirements of most management system standards without difficulty. Save time and money, keep correct records and eventually perk up supplier performance by using vendor management software.

Benefits of these software solutions

In today's business environment, important business processes need to be crisp, effective and proficient more than ever. Vendor management software trims down the resources and time usually dedicated to evaluating supplier performance. This will facilitate improved handling over vendor approval and management. Added features to look for in a vendor management software system comprise the following:

• Security verification and authorization techniques
• Trouble-free easy to use interface
• Speedy access times
• Flexible designer tools
• Reporting abilities
• Effortless learn ability
• Strong support

Advanced systems are simple to setup and with communication tools and work-flows; supplier performance and assessments no longer need the fulltime effort of a worker. The data gathered to evaluate the performance of the supplier may come from several sources some of which may not even be match your facility. Assorted functions like sales, quality control, engineering and manufacturing may independently data that will be automatically compiled and calculated.