Whether you have a handful of suppliers or suppliers by the dozen, you need supplier management software to keep an eye on performance, compliance, sustainability, and other factors that affect contract delivery.
This kind of oversight is particularly important in public sector procurement, where contracting authorities are answerable to the public – not to mention the central government. Authorities can’t risk supporting underperforming suppliers or suppliers who breach ethical procurement rules.
This post will look at the role supplier management software plays in public procurement, its challenges, benefits, and best practices.
Meanwhile, why wait to find out more about supplier management when you can book a free supplier management demo with a Delta eSourcing public procurement expert.
The Supplier Management Challenges Facing Procurement Teams
Procurement software for supplier management is an invaluable tool, but like all things in life, it’s not perfect. Government buyers still have to overcome some challenges in the supplier management process.
4 Common Challenges
Challenges vary, depending on the contract, supplier, and buyer. However, there are supplier management challenges all buyers face.
1) Supplier Performance
One of the primary benefits of supplier management software is the ability to monitor suppliers’ performance. This is made difficult when suppliers don’t actually buy into performance management processes.
In this instance, instead of optimising collaboration and relationship-building opportunities, suppliers feel like they’re under surveillance. It’s not pleasant operating under a microscope, knowing your every move is picked apart and judged.
Obviously, that’s not what happens (most of the time), but it can feel that way.
Buyers can address the problem by emphasising the focus on partnerships and collaboration. They should share the details of their performance assessment process, so key suppliers know exactly what is expected of them performance-wise.
There should be guarantees of transparency and respectful, open, and honest communication.
2) Poor Visibility
Suppliers aren’t open books. They’re not required to be, but it becomes a problem when contracting authorities are in the dark about things like regulatory compliance and timelines. This goes against the spirit of the Procurement Act 2023, but more importantly, it increases potential supplier risks, including poor quality, unexpected delays, and unethical business practices.
There’s no trust when shields are down, but there are ways buyers can convince suppliers to raise shields and embrace transparency. Just as with supplier performance challenges, the key is to open channels of communication and emphasise the importance of partnerships over transactions.
Collaborating on KPIs helps establish accountability or joint ownership of the projects. Setting regular performance assessments gives suppliers a reasonable timeline to hit KPIs. Open and honest communication allows suppliers to feel secure enough to report delays or disruptions. It’s possible that collaboration could achieve complete visibility, overcome obstacles, and keep the project on track.
3) Manual Processes
This one is on the buyers. It’s no secret that the government is on a mission to digitise its departments, councils, and bodies. This is great for medium to large government organisations that have budgets to cover upgrades. Smaller organisations, usually small local councils, don’t have the resources to ‘waste’ on new supplier management software, let alone the training required to bring staff up to date on the latest tech to properly optimise new supplier management systems.
Manual processes and legacy systems are still the norm, which means the risk of errors and inefficient operating processes is high. It also affects productivity as employees spend chunks of time on manual tasks, like supplier data management, instead of their core activities.
A potential solution lies in the cloud. Cloud-based modular supplier management platforms are scalable. Cash-strapped councils can upgrade their systems one module at a time, focussing on the most important tasks first.
4) Compliance Risks
One of the most important tasks for supplier management teams is ensuring suppliers remain compliant with contract, industry (e.g., healthcare), and national procurement regulations. It’s tricky to manage suppliers when there are several on the books, especially if they operate outside the UK and the Republic of Ireland.
It helps to have suppliers who are diligent about meeting compliance requirements. This is where communication and collaboration earn their stripes. Supplier management software also comes in handy when it coordinates suppliers and keeps an eye on their compliance status. It can even set reminders for buyers and suppliers to check if all the Ts are crossed.
Top 5 Benefits of Supplier Management (SRM) Software
The benefits of supplier management software are legion. We’re going to look at the top five.
1) Relationship building
Healthy supplier management, aided by SRM software, is a great way to build constructive, mutually beneficial relationships with product or service providers. Your understanding of one another grows with the relationship, which can facilitate collaboration on tender requirements. Ultimately, this results in contracts that are delivered to a high standard, with social value initiatives that perfectly reflect buyers’ goals.
2) Cost savings
Close relationships can facilitate price negotiations. The process is fair with a view to mutually beneficial compromise that doesn’t stint on the overall value contracts require. Costs are also saved when it comes to inventory and stock orders because the nature of supplier relationships enables them to anticipate buyers’ needs and optimise inventory management.
3) Performance tracking
So, supplier performance can be a challenge, but SRM software can help with some of the practicalities. For instance, it can schedule regular assessments, keep track of KPIs, and analyse performance-related metrics. This information is important to supplier lifecycle management because it ultimately decides if suppliers will remain in the supply chain or be dropped like a hot potato.
4) Regulatory compliance
So, compliance can also be a challenge, but once again, SRM software comes to the rescue. It can be set up to monitor compliance with the contract’s criteria, industry standards, and national regulations. It can also be set to send alerts for things like renewal dates (should any certifications or accreditations need to be renewed) and sudden non-compliance, for example, forgetting about renewal dates or not updating documents, should regulations change.
5) Time saving
Supplier management systems can provide significant time savings through automation, relieving your staff of repetitive admin tasks related to supplier information management (also minimising the risk of errors). They also update information in real-time. There’s no lag and no delays, so stakeholders can respond immediately and make informed decisions to reduce risk and capitalise on opportunities. This saves time and money.
Delta Supplier Management Software
Delta eSourcing provides a range of eProcurement services, one of the most popular is our supplier management system.
Our supply chain management software is designed to help contracting authorities identify, invite, and manage suppliers efficiently. One of our standout features is our Branded Buyer Portals. The portal is a secure platform containing a set of online pages that include all your procurement-related information. It’s like a ‘front door’ that lets you publish your contract notices in one location in real-time and guides interested suppliers to your welcome mat, where you can decide who to let in and who to turn away.
You can connect your portal to our eSourcing service with its 95,000 suppliers or remain independent to build your own supplier community. Either way, you can tailor your portal by picking and choosing, and mixing and matching our procurement-related modules that cover things like supplier onboarding and spend management.
The aim is to create a bespoke platform that increases transparency in your contract notices. It also serves as a supplier database portal that simplifies supplier management and facilitates supplier engagement.
Procurement consortia
The branded portals can also be set up to accommodate a group of buyers working together – a consortium of buyers. It’s still possible for individual buyers to publish their contract notices on the secure platform, so it’s not strictly for group tenders by several businesses. Tender opportunities are published on a contract notice board, and you can create a dedicated email alert service to notify your supplier base of new contracts.
Why Procurement Professionals Trust Delta eSourcing
Over the years, Delta eSourcing has built a formidable reputation as one of the best eProcurement portals in the UK. The reason is simple: We never rest on our laurels. We’re always evolving and innovating to ensure the public procurement process is as painless as possible for buyers and suppliers. That’s why we have over 500 active UK buying organisations and more than 95,000 suppliers on our database.
Reasons to choose Delta include:
- An unlimited number of category/supplier lists
- Storing and managing framework lists
- Real-time data updates
- Easy-to-use interface
- All-in-one suite of public sector procurement services
You can find out more about how our suite of services can benefit your procurement activities by booking a free demo today.
