What is supplier lifecycle management? What are its benefits and How can Procol help?

Supplier lifecycle management is a process that helps companies effectively manage relationships with suppliers from onboarding to offboarding. It involves managing all aspects of the supplier relationship throughout different stages – from initial contact to becoming an approved supplier, ongoing performance management, and eventual termination of the relationship. In this article, we will explore what supplier lifecycle management entails, its key benefits, and how Procol can help companies implement an effective supplier lifecycle management process.

What is Supplier Lifecycle Management?

The term “supplier lifecycle management” describes the organised procedure for overseeing all communications along with data pertaining to suppliers from the start of the business relationship to its conclusion. The method entails segmenting the relationship into discrete phases and instituting protocols as well as guidelines to oversee suppliers as they go through every phase of the supplier lifecycle.

Supplier lifecycle management (SLM) encompasses the processes involved in managing suppliers from onboarding to offboarding. Its benefits include enhanced supplier relationships, reduced risks, and improved efficiency. Procol, with its robust features, facilitates SLM by streamlining procurement processes and offering tools for Digital Performance Management, ensuring optimal supplier performance and accountability.

The typical stages in a supplier lifecycle management process include:

1. Supplier Onboarding: Finding new suppliers that can satisfy the needs of the company requires a thorough RFP along with a selection process, which is known as supplier onboarding. Acquiring supplier documentation and data, including NDAs, insurance policies, financial records, quality certificates, and supplier audits as well as evaluations, is necessary in order to find as well as approve eligible suppliers. Onboarding also integrates qualified suppliers into other systems, such as the ERP, through the construction of supplier profiles. This facilitates the setup of suppliers for payments and purchases.
2. Supplier Development: Supplier Development: The goal of this phase is to enable new suppliers to satisfy the standards as well as requirements of the business by strengthening their skills. It might entail offering suppliers instruction in addition to  resources on subjects, including best practices for ordering along with delivery, compliance procedures, and quality control procedures. 
3. Supplier Performance Management: Using scorecards, evaluations, alongside analytics, this crucial phase is regularly monitoring KPIs including quality, delivery, cost, responsiveness, HSE compliance, and more. It also involves performing recurring audits as well as getting input on supplier service from internal stakeholders. The objective is to proactively detect as well as resolve any problems or deficiencies to guarantee that providers continuously fulfil or surpass requirements.
4. Supplier Improvement: This stage focuses on working with underperforming suppliers to assist them in improving their capabilities, quality, delivery, etc., through corrective actions. It comprises identifying the root reasons for underperformance, cooperating to construct comprehensive improvement plans, setting goals and deadlines, along with routinely evaluating progress, as well as rewarding suppliers who successfully complete the corrective actions.
5. Supplier Offboarding: This last phase deals with terminating contracts with suppliers that the company no longer wishes to do business with or who are being replaced. It entails both removing access as well as ending agreements.

By dividing the supplier relationship into distinct stages and establishing clear processes, supplier lifecycle management brings structure and efficiency to what was typically an ad-hoc, disorganised process earlier.

Benefits of Supplier Lifecycle Management

Implementing an effective supplier lifecycle management strategy brings several important benefits to companies:

1. Increased efficiency: One of the main advantages of supplier lifecycle management is increased efficiency. From onboarding to offboarding, there are now defined and automated processes for every stage of the supplier relationship, which allows for the efficiency of several manual as well as repetitive operations that were previously a major waste of time along with resources. The procurement/supply chain team can save time alongside money by automating tasks, including sending communications, along with gathering documentation, as well as generating reports. This increases operating efficiency overall.
2. Improved visibility: A single source of truth is offered by a centralised system, which improves leadership insight into supplier performance and risks, in addition to problems. From any device, key stakeholders may access current data as well as analytics about all suppliers in one location. This aids in their quicker along with better-informed decision-making. Increased cross-functional visibility also makes it easy to identify possible issues early on.
3. Higher quality: Qualifying suppliers rigorously by evaluating their capabilities, finances, quality systems along with the other criteria at onboarding stage, as well as then closely monitoring their ongoing performance through scorecards as well as other metrics, helps ensure that only the most qualified, consistent and highest quality suppliers who meet all requirements are used for critical business needs.
4. Reduced risks: Proactive management of suppliers through each stage helps identify as well as address issues early on, reducing risks of supply chain disruptions. 
5. Strengthened relationships: Two-way communication as well as supplier development initiatives, help foster long-term, collaborative relationships with key partners.
6. Cost savings: Consolidating suppliers through rigorous selection, improving under-performers, as well as managing total costs of ownership leads to significant cost optimization.
7. Compliance: Having documented processes as well as audit trails ensures all legal alongside industry compliance requirements regarding suppliers are met.

By bringing structure, visibility, as well as control over the entire supplier relationship lifecycle, supplier lifecycle management helps procurement as well as supply chain functions operate more strategically in addition to achieving their business goals.

How Procol Can Help with Supplier Lifecycle Management

Procol’s supplier lifecycle management platform offers robust digital onboarding solutions that allow suppliers to efficiently complete online profiles and submit all necessary documents, such as certificates, policies as well as credentials, through a user-friendly portal. The platform automates complex workflows to seamlessly route submitted documents for review and approval, along with instantly integrating new supplier data into the centralised database upon acceptance. This significantly speeds up the traditionally long and paper-based onboarding process.

The centralised database is a single source of truth for all supplier information that procurement teams can easily access from any device. It provides real-time visibility into supplier performance metrics as well as risk levels. Built-in scorecards, dashboards and analytics reports generated from this database help teams make informed decisions by comparing suppliers along with identifying underperformers. Advanced risk assessment features also aid in proactively determining as well as mitigating potential issues like quality issues, supply disruptions, financial instability etc. posed by different suppliers.  

Additional capabilities like pre-configured workflows for routine tasks, mobile accessibility, built-in collaboration tools as well as seamless ERP integrations provide a comprehensive as well as user-friendly SLM solution. It is also one of the leading e auction sites. By leveraging Procol’s full suite of solutions, companies can systematically manage supplier relationships digitally at each stage of the lifecycle from onboarding to offboarding. This helps boost overall supply chain efficiency, resilience and competitiveness through structured governance of supplier performance, risks along with issues.

Conclusion

Supplier lifecycle management is a strategic approach that helps procurement as well as supply chain teams establish structure, control along with collaboration across the entire spectrum of supplier relationships. Leveraging a platform like Procol allows organisations to streamline processes, gain actionable insights and strengthen partnerships with suppliers. This ultimately enhances business performance, competitiveness and customer value.