In order for procurement to remain strategic, manually intensive processes, such as supplier discovery, need to become more agile and intuitive.
Doesn’t it seem like procurement reaches a new strategic milestone every day? These are amazing times to work in this field. We’ve been pushing towards this point for so long! Now that we’re here, we need to make sure we keep up the momentum.
None of procurement’s less strategic work is going away anytime soon, so if we’re going to avoid being dragged back down, we need to look for opportunities to streamline our processes. Anything that takes procurement away from working with suppliers and stakeholders should be a prime target for change.
Streamlining Supplier Discovery
One of those processes – supplier discovery – is long overdue for a makeover. Given today’s time constraints and better places to invest effort, there is no reason for procurement to be limiting the potential of a sourcing project by web-surfing to find prospective suppliers.
As Chris Silva, former Senior Director of Sourcing & Procurement at Synageva BioPharma Corp., recently told us, “Initial due diligence varies significantly from hours to months, depending upon many factors including data availability on the supplier, the supplier’s availability and response, the availability/completeness of third party data, and the complexity and completeness of the requirements, to name a few.”
Not only is the process inefficient for the reasons Chris points out, there is not really a good way to know if you’re missing a prime supplier candidate. The Internet doesn’t usually reflect the perspectives and opinions of your colleagues, and despite how popular online reviews and feedback are for consumer purchases, they just haven’t caught on in the B2B world.
Teresa Fiore, Associate Director of Global Sourcing for Marketing and Sales at Boehringer Ingelheim USA Corporation, pointed out the need to synthesise multiple sources of information, saying that finding new suppliers is “a combination of our internal sourcing knowledge combined with our internal marketing clients’ knowledge.”
Pulling relevant information from these multiple sources without adding time to the process is the first challenge to be addressed when streamlining supplier discovery.
Supplier Discovery – The Real Story
In November, ProcureCon surveyed 40 procurement execs like Chris and Teresa to find out what they really think of supplier discovery. The results tell an interesting story about the role of knowledge management in procurement today:
- 83 per cent of searches take one to six weeks (or more) to identify the right suppliers and contact information prior to running an RFP.
- 78 per cent of respondents share supplier information with their internal partners in person, and 70 per cent share through email. Only 25 per cent said they use online portals.
- 70 per cent of procurement and sourcing professionals report that the most credible source of supplier intelligence comes from their internal peers.
- 62 per cent of the respondents indicated they have little satisfaction with the technology solutions they use to gather supplier information and manage category intelligence today.
Clearly, there are real challenges around finding suppliers and then managing the organisation’s knowledge about them. One to six weeks to identify qualified suppliers? That hardly meshes with procurement’s agile, responsive new brand.
If you can go to Procurious and search their members for skills and sharing activity, why shouldn’t the same be possible on the supplier side? It’s not as if the technology doesn’t exist. We just have to prioritise supplier discovery and knowledge management so that they get fixed – fast.
If you’re interested in learning more about the research, including quotes from follow up interviews done with industry leaders, click here to download and read the whitepaper: Improving Strategic Supplier Discovery Through Technology.
Stephany Lapierre is Founder and CEO at tealbook, intuitive platform that mutually benefits companies and their supply partners by improving access to instant and trusted supplier intelligence, discovery, and identification.