New Supplier Management Survey: Cost Reduction and Compliance are Main Pressures
In a new report based on survey results, “The Value of Strategic Supplier Data Management”, The Aberdeen Group reviewed how supplier data is used, managed, and leveraged to achieve superior supply chain performance. The report summarizes survey results among supply chain, sourcing and procurement organizations across all industries and geographies. In particular, it examines the capabilities and technologies of Leaders vs. Followers. (Leaders are defined as the top 30% of all respondents based on performance).
According to Bryan Ball, Vice President and Group Director, Supply Chain and Global Supply Management Practices at Aberdeen Group, the highest ranking business pressures for sourcing, procurement and supplier management teams are:
- Cost reduction and savings (92%),
- Increased pressure for regulatory compliance and internal compliance to contracts (45%).
“Even the largest global organizations lack the visibility to all financial, product, shipment, environmental and trading restrictions that exist, for all items in all countries. Keeping up with all compliance issues is a risk issue in itself. In addition to external compliance – internal compliance to contract requirements and audits have increased in complexity due to financial reporting guidelines and regulatory documentation.”
So what are the capabilities and technology Leaders have in place for a robust supplier data management program to support the expectations of increasingly complex supply chains? How do Leaders leverage supplier information management to streamline their supply chain processes and accelerate the time to information and decision making?
Leaders are 73% more likely to have a multi-domain MDM system.
According to Aberdeen, leading organizations in supply chain, sourcing and procurement are 73% more likely to have a multi-domain MDM system in place to manage their supplier information.
“In order to accomplish their mission, supply chain, sourcing and procurement Leaders understand that effective supplier data management is a core requirement to their success. This can be seen in their adoption of using multi-domain MDM systems for supplier data management.”
In fact, having a master-data fueled solution in place that provides access to a Supplier360 view across the enterprise allows sourcing and procurement teams successfully increase savings and ensure regulatory compliance. It all starts with centralizing and streamlining the end-to-end process of managing supplier information and the products and services they provide. To reduce costs related to supply chain, sourcing and procurement, you need to be able to successfully negotiate prices and payment terms based on a total understanding of your supplier relationship and supplier spend across the business and leverage technology that helps reduce your business overhead to manage suppliers and their information.
Mastering supplier data with MDM can also help reduce risk related to suppliers and to more easily assess your suppliers’ compliance. Aberdeen recommends combining in-house data along with a third party risk assessment partner to develop a comprehensive risk assessment view.
To review the full list of key takeaways and recommendations, download the full report “The Value of Strategic Supplier Data Management” from The Aberdeen Group (free).