How do you keep track of your suppliers in a smart and efficient way?
Solution: Create a smart library with detailed information about your major suppliers, so-called “Supplier Passports” or “Supplier Profiles”, as well as a summary and comprehensive list of the most necessary information on each provider. Keep these together in one place, preferably on an intranet platform easy accessible for all co-workers who need the information.
Make an updated one-pager on each supplier. Should you have a very large number of suppliers, you may limit the Supplier Passports to cover the suppliers corresponding to 80% of the spend (the 80/20 rule), or to cover only Collaborative and Partner suppliers. A Supplier Passport (or Supplier Profile), could look like below example:
The Supplier Passport is a great way to keep updated key information on your suppliers, such as;
- short company description (turnover, production sites, global HQ location, etc)
- production capabilities (this could be very detailed with relevant capabilities list with checked tick boxes)
- business with buying company (relationship since what year, mutual spend/turnover shares, contract details, payment- and inco terms, etc)
- other (known) customers the supplier is serving, i.e. including competitors to the buying company
- key account manager and contact information
Above is only examples what you may cover on the Supplier Passport one-pager. We call it “passport” as it should contain short and important information about the supplier that define the company making it a unique piece of information. Keep it updated at least once per year.
Depending on the complexity, it may seem like an exhausting task to create Supplier Passports for the suppliers in your spend scope or category. However, if you are a team, split the work among all buyers in the purchasing team. If you have an assigned “relationship manager” for each supplier, this is the person who should create the Supplier Passport for the supplier and keep it updated. Once created, the work on updating the one-pagers is a quick activity, and you will have a fantastic source of information on your suppliers. This one-slider is used in the Supplier Development Plan (as front page) with those suppliers with whom you will run collaborative and relationship enhancing SRM programs. Read more about that in the SRM 4-Step Process.
Supplier list with key information
Without a comprehensive list of your suppliers that contains key facts on each player, you will have endless work on gathering data for your own needs or to serve others in the company. Have ONE LIST, ensure it contains the information you (and your colleagues) need and update it regularly. This will bring order to your widespread data and save you time once you need it. Such supplier list may have following appearance:
You may find out from this list the following information on each supplier:
- Size of the spend with the supplier
- Share of category spend
- Relationship type (read more about this in the SRM 4-Step Process)
- Lead country (relevant if your spend scope is regional or global)
- Contract expiry date
- Agreed conditions, whatever is relevant for the buying company (for example annual price reductions or contractual clause on Value Creation or Continuous Improvements)
- Payment terms, Incoterms
- Lead contact – name of the buyer who is relationship manager for the supplier
Rather than having several supplier lists, our recommendation is to add relevant columns and stick to only one supplier list. You may work with this list to show your spend concentration plan, by for example highlighting the supplier name cells in different color (red for “exit planned”, green for “growing supplier”, and so on). Just be creative with this list and make it the one-and-only list of the suppliers in your spend scope. If you have different categories for all your suppliers, either insert a column stating “category”, or make different sections of the table that keep the suppliers in different categories separated from each other.
You may give your Smart Supplier Database a brand name of your choice that you sell in to colleagues and stakeholders. Refer to the supplier database by its given name with a link to where its accessible. Make people used to find it and capture the information they need by themselves. You will be perceived as a good house-keeper, and you will save time! You may also save money through a Smart Supplier Database. Agreed conditions with suppliers might get lost due to organizational changes or details of conditions in past agreements may simply be forgotten. By keeping details and key information included in the supplier list, you will manage your spend flawlessly without such human mistakes.