Distributors: how can you optimise your supplier management?

Supplier management is an extremely complex and costly task for a company’s procurement function. That’s why purchasing departments set up framework agreements with distributors that offer the widest range of services. However, this means that retailers must handle hundreds of thousands of data records, which in turn makes supplier management more intricate throughout the world. Managing such a service involves identifying, listing then proposing the appropriate goods and services. It’s also important to identify those that are rarely needed by customers. Monitoring the evolution of the product ranges remains therefore crucial, the objective being to always have an up-to-date and innovative offering. At the same time, it is vital to ensure the quality and availability of each product or service and access to all the necessary documents (certificate, technical documentation, guarantee, etc.).

To meet these challenges, Manutan recommends a purchasing organisation based on three essential pillars for effective supplier management.

1. Improved supplier management with efficient sourcing

Supplier management is based on all the actions taken to guarantee company performance and timely deliveries. Effective supply chain management ensures that a healthy relationship is maintained between the company and its suppliers with a view to customer satisfaction. Solutions for optimal management begin with identifying appropriate partners.

Product origin and conformity are essential criteria. For branded products, this also ensures that they are supplied directly by the manufacturer and are therefore not counterfeit. The information collected upstream of the signing of supplier contracts guarantees that consumers are offered the greatest products that meet the standards, thus minimising the risk of dissatisfied customers later on.

To ensure product quality, a control process must be put in place, including a systematic check of the output of each delivery, as well as an audit of the production plants. This is the best solution to obtain a constant quality rate, whatever the origin of the products you sell.

2. The implementation of an innovative SRM[1] combining efficiency and risk prevention

The three main objectives for a Class C supplier, also known as tail spend, are:

• Obtaining lower delivery costs;
• Ensuring the availability of products;
• Meeting delivery deadlines.

 

A study published by Sendcloud in 2020 provides some interesting data: 65% of European consumers abandon their shopping cart when they discover the delivery costs, which they deem to be too high. Product availability and on-time delivery are also crucial criteria for a successful shopping experience. To meet these three major challenges, most of the stock should be stored and managed in the supplier’s warehouses, while another part should be organised directly from the production sites known: this is known as drop-shipping.

This Europe-wide survey provides additional information on customer satisfaction with the delivery process. For 55% of European consumers, the environmental impact of delivery is important or most important. They, therefore, favour purchases that include an eco-responsible mode of transport. Partner management — the customer relations department — can use this data to develop a green delivery process while maintaining the desired efficiency and performance.

A team dedicated to partner relations and managing the continuous improvement plan

To ensure optimal quality of deliveries, a dedicated team monitors all partners and handles the continuous improvement plan. Supplier relationship management plays an important role in the smooth running of a business. For example, as part of its supplier management, Manutan organises a working day with more than 150 direct delivery suppliers and produces a performance indicator guide to monitor the delivery quality of each supplier. Besides, supplier rationalisation is one of Manutan’s key solutions.

Its SRM also includes a supplier portal providing access to all necessary operations (order, delivery, return, etc.), documents, information, and progress reports. This platform makes it possible to simplify, accelerate and improve all actions taken with suppliers. As part of a process of constant improvement, the portal is managed by a “supplier advisory board” (a project team made up of suppliers) responsible for expressing their views and voicing their needs.

Finally, developing a strategy for improving supplier relations is important for good supplier management. To achieve this, Manutan uses the “Net Promoter Score[2]”. Analysis of the collected data and feedback makes it possible to implement specific continuous enrichment plans for each supplier, in every country.

3. Supplier rating as a performance improvement solution

Supplier management also requires the establishment of an evaluation system for all suppliers based, for example, on three criteria:

• Product quality;
• Delivery times and compliance;
• Innovation.

While the first two criteria (quality and delivery) can be used to define the necessary improvement actions for each supplier, the whole evaluation system can be used to identify yearly the “premium suppliers” who offer an exceptional quality of service to customers!

At Manutan, this recognition encompasses a range of benefits, including:

• The promotion of goods through joint marketing operations and communications with the sales force;
• A dedicated space providing full access to the Manutan teams (including product managers, marketing, and editorial teams) and the ability to contact them easily.

Unlike distributors, marketplaces cannot[3] systematically ensure either the origin or the quality of the products they deliver. Optimal management of a class C offering, also known as tail spend, involves the optimisation of supplier management with long-term investments, efficient organisation, and real expertise to offer quality products with guaranteed origin, and an exceptional and seamless buying and delivery experience.

[1] SRM = Supplier Relationship Management

[2] Net Promoter Score = indicator for measuring customer satisfaction and loyalty

[3] Marketplaces