Are you getting all you can get out of your supplier relationships?

There are procurement operations out there working hand-in-hand with suppliers and saving bundles of money. The key, the researchers insist, is converting your average supplier into an enabled supplier.

This means starting to rely on suppliers for some duties you might now handle in-house. You let go of the cost and headache of executing the duties, but you don’t relinquish ownership over the functions.

Examples:

• Setting up an an automated system for handling purchase orders, invoices, related paperwork and other communications.
• Making sure the catalog content (if there is a catalog) is managed online, instead of costly paper catalogs and burdensome paper orders.
• Ending the tradition of checks changing hands — all payments are made electronically.
• Establishing a network among the procurement, finance, A/P and IT departments, to put everyone on the same page and eliminate the chances of communication breakdown in dealing with suppliers.

At the same time, procurement has access to all supplier information, including collections, verifications and other responsibilities.

Looking for a little fuel to generate buy-in? Your competition is already plugging into supplier enablement. The levels of importance assigned to supplier enablement:

• Critical — 18%
• Very important — 54%
• Low — 15%
• Neutral — 9%
• Moderate — 4%

Source: Aberdeen Group, 4/08

Tags: A/P, finance, procurement, purchase orders, supplier