As the global supply chain continues to evolve, more and more businesses are finding themselves working with multiple vendors to establish supply chain resiliency, reduce costs, and get products at the best possible price. Managing relationships and contracts with hundreds of suppliers can be complex and challenging, but there is a solution: Supplier Catalog Management.
In this ultimate guide, we’ll cover everything you need to know about Supplier Catalog Management, from what it is and how it works to the benefits it can offer your business. So let’s dive in!
What is Supplier Catalog Management?
Supplier Catalog Management is the process of collecting, storing, verifying, and maintaining data concerning suppliers and their products or services in a centralized location. It involves creating and maintaining a detailed database for the suppliers a business works with, including all necessary information for conducting business with them, as well as historical and benchmarking data.
A Supplier Catalog Management system can collect data such as contact information, pricing and costs, production capabilities and turnaround estimates, payment terms and accounting information, delivery schedules, historical transactional data, price benchmarking, performance data, and contract information.
The goal of Supplier Catalog Management is to increase communication between buyers and suppliers, improve supplier relationship management (SRM), and centralize data for future use.
How does Supplier Catalog Management work?
Supplier Catalog Management works by creating a centralized location for all supplier-related information. This information can be collected from various sources, including supplier registration forms, purchase orders, invoices, and other documents. This data is then organized and stored in a single, easy-to-use platform, allowing procurement teams and accounting to maintain an organized, scalable process.
Supplier Catalog Management solutions can be integrated with other procurement platforms, providing easy workflows and curation for procurement across the organization. The technology should be intuitive and flexible to use, with dynamic search capabilities, preferred vendor curation, workflows and approval automation, and role-based spend guidelines.
The Benefits of Supplier Catalog Management
Supplier Catalog Management offers a range of benefits for businesses of all sizes and industries. Here are just a few of the benefits you can expect to see when implementing a Supplier Catalog Management system:
1. Centralizes Information
Centralizing vendor data with Supplier Catalog Management allows businesses to streamline processes such as purchase order creation, order processing, payment, and tracking. It also helps identify vendors with the best prices and services, as well as keep track of quality assurance protocols. All departments and stakeholders have access to an organized record of communication and transactions with vendors.
2. Enables Performance Management
Supplier Catalog Management allows companies to track and measure supplier performance over time. Centralized supplier information allows reporting and analysis on supplier quality, contract compliance, cost savings, and other metrics that can be used to make informed decisions about suppliers. It improves strategic sourcing initiatives and ensures cost performance remains strong over time. Additionally, it helps companies identify gaps in performance or the need to evaluate other options.
3. Improves Information Governance
Supplier Catalog Management ensures secure communication protection against unauthorized access, prevents data loss or theft, and provides an efficient platform for managing all vendor-related activities. This level of security is especially important when handling sensitive information, such as bank account numbers.
4. Lowers Supplier Risk
Supplier Catalog Management allows organizations to maintain up-to-date and accurate records of their suppliers, including contact details, financial terms, performance profiles, and banking information. It ensures compliance with regulatory and legal requirements and reduces the potential of procurement fraud through supplier data manipulation. Data security is important since nearly 70% of organizations experiencing fraud report that the most disruptive incident came via an external attack or collusion between external and internal sources.
5. Reduces AP Processing Burdens
A Supplier Catalog Management system streamlines the payment process and reduces manual data entry, resulting in fewer errors (such as invoice duplicates or data entry errors) and more accurate payments. Automating the payment process with Supplier Catalog Management also allows businesses to track spending patterns better, identify potential opportunities for cost savings, and improve forecasting and budgeting.
6. Speeds the Buying Cycle
A centralized procurement solution allows buyers to easily search for and access relevant supplier information, such as product availability, pricing, delivery times, and payment terms. With information at their fingertips, buyers quickly identify potential vendors and make decisions faster. Some solutions, like Order.co, enable direct ordering and approval from within the system, further speeding the procurement process.
7. Enables Reporting and KPIs
With a Supplier Catalog Management system, managers and finance leaders use data within the system to track key performance indicators (KPIs) such as delivery times, quality of products, order accuracy, cost, and contract compliance. This provides visibility into each vendor’s performance and real-time data for stronger procurement outcomes and supplier lifecycle management. Reporting allows stakeholders across the organization to quickly gain actionable insights for better-informed decision-making.
Choosing a Supplier Catalog Management Solution
There are several factors to consider when choosing a Supplier Catalog Management solution. Here are some things to keep in mind:
1. Integration Potential
Supplier Catalog Management should be part of your larger information ecosystem. Look for a solution with off-the-shelf and API-based integration opportunities to prevent redundant data input, ensure accurate numbers, and reduce information silos.
2. Real-time Data Access
Constant, granular access to spend data makes reporting easier and more effective. It provides a consistent, complete view of the procurement function and the vendors within the system.
3. Reporting and Analytics
Centralized data is most valuable when it’s easily accessible. The right spend visibility brings context to your purchasing, highlights opportunities for savings and growth, and informs discussions about vendor selection and performance.
4. Intuitive, Flexible Use
Ease of use is an important ingredient in Supplier Catalog Management. Your chosen solution should be easy for IT and managers to administer and simple for buyers to navigate. Look for technology that makes it easy to perform daily research, procurement, and reporting activities, including dynamic search capabilities, preferred vendor curation, workflows and approval automation, and role-based spend guidelines.
Supplier Catalog Management is a crucial component of a successful procurement process. By centralizing vendor information, enabling performance management, improving information governance, reducing supplier risk, and streamlining AP processing, businesses can achieve cost savings, smoother operations, and better procurement outcomes. When choosing a Supplier Catalog Management solution, be sure to consider integration potential, real-time data access, reporting and analytics, and intuitive, flexible use. With the right solution in place, your business can reap the benefits of a streamlined, efficient procurement process.