How to manage purchase and supplier

With the increasingly fierce market competition, a series of technological changes such as Internet, big data, artificial intelligence, Internet of things and so on, make the external competitive environment of enterprises more complex, and invisibly put forward higher requirements for the flexibility of enterprise management and each major function among each other. From the point of view of procurement, we have already separated from the traditional procurement mode, and directly pushed the whole supply chain management. Focusing on procurement and supplier management, how to control costs and form a symbiotic ecological relationship with suppliers has become one of the effective ways for enterprises to enhance their core competitiveness. So, how to manage purchasing and supplier?

Professional management books are often divided into several parts, including: procurement organization and personnel, procurement plan and budget, procurement bidding, bidding and evaluation, procurement negotiation skills and strategies, procurement certification and order, procurement cost and price, procurement audit and control, supplier development and selection, supplier control and management. However, in practice, it is mainly classified by material purchase and bidding management. If it’s difficult to finish in three days and nights, we can combine some enterprise management software, such as SAP cloud ERP software, to realize the management of purchasing and suppliers.

Imagine: if we can fully understand the new and reliable supplier information, as well as the procurement expenditure, performance and risk situation, supplier management will become very simple. For another example, how easy it will be to incorporate supplier qualification review and segmentation workflow into the procurement process to reduce risk and prevent waste. All of these, like SAP system, can be easily satisfied. Simplification of complexity makes purchasing and supplier management super easy.

First of all, a one-stop supplier management suite built by SAP integrates supplier information, life cycle, quality, performance and risk, and integrates with procurement management to form an organic part of an end-to-end supply chain system. It can ensure the cooperation with the preferred supplier, reduce the risk of every link from supplier startup, qualification review to segmentation and performance management.

As shown in the figure, SAP system can realize the organic operation of the whole procurement process through the above relationship management. It will not only obtain unified and reliable supplier records, integrate consistent supplier qualification and detailed processes with other procurement processes, and extend supplier risk management and compliance management to the whole supplier group, which is the secret of enterprise management software SAP in supplier management. Let’s take a look at how the application suite realizes supply chain management in a system like SAP BYD.

Procurement and supplier management is actually an organic part, involving supplier selection, evaluation, performance evaluation, incentive and conflict management. How to carry out procurement and supplier management, in the final analysis, is a systematic thing. For example, it is difficult to realize the flexible operation from supplier management to procurement process by relying solely on human or traditional ERP software and simple procurement software.

When controlling the purchasing cost and strengthening the management of suppliers has become one of the effective ways to enhance the core competitiveness of enterprises. In this way, we need not only advanced management ideas, but also successful purchasing strategies and supplier management methods, so that enterprises can occupy a place in the fierce competition.

For a more comprehensive understanding, consult the acloudear–SAP partner.

This article "How to manage purchase and supplier" by AcloudEAR. We focus on business applications such as cloud ERP.

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