Process, Benefits, and Practices of Supplier Management

Due to globalization, we can see a paradigm shift in business processes and day-to-day operations.

As they are getting more complex and competitive, firms acknowledge the need for supplier management to enhance business performance.

Suppliers are one of the essential components of the business, and hence managing them can sometimes be very important.

What is the actual meaning of supplier management? 

Supplier management is the process of handling the entire lifecycle of the supplier in the organization. The management of suppliers is not just to identify, select and manage the right supplier; it deals with multiple aspects to increase as much value as possible.

There are multiple suppliers in a business, and each of them shares its unique importance. The definition of supplier management cannot cover all the things. Hence this blog will help you understand supplier management processes, benefits, and practices. Read along to find out all about supplier management.

Reasons why we need supplier management? 

Whenever we talk about a successful business, we always talk about the supplier relationship and the management of the specific business.

The primary purpose of supplier management is to see if the supplier is working in accordance with the organizational goals or not. Technically, if the supplier will not be complying with the norms of the company, things can turn very drastic.

Secondly, supplier management also deals with identifying the improvement areas and engaging in the activities that help improve the supplier consumer relationship. The better the supplier consumer relationship, the better the outcome.

Above mentioned two purposes define the key factors that deal with the wide definition of supplier management. You can go with the solutions for eprocurement. Eprocurement makes computerized conveying lines between purchasing associations and their providers and supports the method involved with demanding, ordering and trade of procurement reports in the business-to-business (B2B) world.

However, the process in which these two things are done is extensive. To get the most benefit from the suppliers, firms track their records, communicate and take regular feedback to improve the relationship.

Some key factors that are driving supplier management

The study of Zycus on building blocks for improved supplier management illustrates what the need for the SM in any business is. Below we have mentioned some of them:

· Reducing risk in the supply chain – Supplier management helps to understand the supplier and make good ties with them, so there is less chance of switching to any other supplier.

· Managing data of the suppliers – SM also helps keep the suppliers’ track record, so later in the future, if you get any chance to get a better supplier, you can compare the stats with the current supplier and decide who can provide the things in better prices. As the ultimate goal of the business is to cut costs and make profits.

· Good relationship with the suppliers – an excellent long-term relationship with the supplier always helps the business to grow faster and create maximum profits. It is not easy for the HR department to collaborate with different suppliers every day for similar products.

· To make business different – Supplier Management helps identify areas where improvement is required and get the competitive advantage over the others.

List of the benefits of supplier management 

Now we have a good idea of what supplier management is; now, let’s look at its benefits to an organization.

It helps to manage a growing supplier chain base effectively. 

The profit margins for the businesses are shrinking day by day; hence they need to select the supplier from the broad base to make them competitive in the international market.

However, the global suppliers are hard to manage, and they increase the complexities in the business. This is where supplier management comes in.

Due to the increase in the number of suppliers, managing them becomes difficult, but with the help of supplier management, you can manage the suppliers with ease.

Tracking the performance of the supplier

A supplier management system helps you collect valuable information and data regarding the lifecycle of the supplier and later take decisions according to that.

In this way, they can identify the area where they need improvements, such as relationships with suppliers, and take measures to do it.

Evaluation of the performance 

This is one of the most significant benefits of supplier management. You have to understand what the supplier is doing for your business to keep the business’s operations smooth.

You can use different parameters to evaluate the supplier’s performance, and it also gives you in-depth insight into the value created by them.

By understanding this, you will keep the suitable suppliers in the list and the bad ones out of the list.

Organizational goals are highly dependent on all the activities suppliers are doing. Therefore, it is important to evaluate their performance.


In this article, we have explained all the aspects of supplier management. We are sure if you have gone through it, you would understand how important it is for the day to day business operations. In a nutshell, we would like to say that, if you want to make your business stand out in this technologically advanced world, you need an effective supplier management plan to ensure that your business has a competitive advantage over other businesses.

Supplier management helps you to save costs improve the service quality as well. So it’s your turn to put your supplier on the priority list and help your organization achieve its goals.  

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