What Are Vendor Management Systems?

The supplier management system is a subsystem of the procurement management system and an important module of the procurement management system. The supplier management system is based on supplier information management, with standardized procurement processes and advanced management ideas. It inspects the supply from multiple aspects such as the supplier's basic information, organizational information, contact information, legal information, financial information and qualification information The strength of the supplier, through the comprehensive management of the supplier's supply capacity, transaction records, performance and other information, to achieve the purpose of optimizing management and reducing costs.

Supplier Management System

Chinese name: Supplier Management System
Belongs to: Purchasing Management System

Attributes: An important module of purchasing management system
Features: Supplier information management as the core

In today's business market, the demand for application software that can help companies with strategic procurement continues to grow. Especially for manufacturing companies, one of the main reasons for this increase in demand is that purchasing decisions are becoming more important to the company's returns. According to a survey by investment banks, procurement and purchase costs now account for 60% of the total cost of goods sold (COGS), compared to only 20% of purchase costs a few decades ago.

The main reason for the substantial increase in the proportion of procurement and purchasing costs is that modern manufacturing companies are increasingly relying on value-added components provided by suppliers for their manufactured products. Most of the value of enterprise end products comes from suppliers. Therefore, manufacturing companies need better supplier management systems when seeking cost control and competitive advantages.

Problems facing companies today:

The company has hundreds of suppliers and thousands of parts. During the supplier meeting, the workload of statistics on abnormal supplier quality and performance evaluation is very large. Has the supplier had any repeated quality problems in the past three months? Supplier performance evaluation shows that the supplier's supply guarantee ability or price level score is low? It is very difficult to understand how the development of a new product supplier is progressing, what problems are found in the supplier's on-site admission audit, which parts samples / small batches pass are very difficult ... These information suppliers management personnel rely entirely on manual statistical inefficiency , And cannot be shared, and interactive email and fax methods such as feedback on quality abnormalities have long cycles, high costs, low efficiency, and difficult tracking.

The supplier management system is a subsystem of the procurement management system and an important module of the procurement management system. The supplier management system takes supplier information management as the core, with standardized procurement processes and advanced management ideas, from the supplier's basic information, organizational structure information, contact information, legal information, financial information and qualification information and other aspects. Investigate the strength of the supplier, and then through the comprehensive management of the supplier's supply capacity, transaction records, performance and other information, to achieve the purpose of optimizing management and reducing costs.

The supplier management system is a solution that is dedicated to the realization of management ideas and software technologies that establish and maintain long-term, close partnerships with suppliers. Its purpose is to improve the relationship between enterprises and suppliers. Focusing on areas related to corporate procurement. The goal is to establish a long-term, close business relationship with suppliers, and jointly develop the market through the integration of resources and competitive advantages of both parties, expand market demand and share, reduce the high cost of the product in the early stage, and achieve a win-win business management model; At the same time, it is a set of advanced management software and technology supported by a variety of information technologies. It tightly integrates advanced information technologies such as e-commerce, data mining, and collaborative technologies to provide strategic design for enterprise products. , Strategic acquisition of resources, effective negotiation of contracts, unified management of product content and other processes provide an optimized solution.

One of the key steps in supplier management is the ability to quickly find the best supplier with a complete historical transaction record to support business decisions. The following takes a supplier management system with relatively complete local functions as an example to briefly analyze the functional modules of the supplier management system.

Introduction to the business model of the supplier management solution:

Use IT technology to create a fair and transparent supplier management platform, to achieve business functions such as supplier files, supplier access, annual supplier monitoring, supplier performance evaluation, and supplier quality statistical analysis. It will implement functions such as supplier development process management, supplier performance evaluation fairness and transparency, supplier supervision, access inspection, and improved tracking management of abnormal quality of incoming materials. Will effectively monitor the supplier's development access site audit situation, sample identification and small batch trial production situation and development progress; coordinate supplier performance evaluation and evaluation score ranking and red and yellow card monitoring; Integration, to achieve a comprehensive quantification of the supplier's incoming qualification rate, the online elimination rate of parts and components in the manufacturing process, and the after-sales PPM value quality level, to provide comprehensive and efficient data support for supplier conferences and improved communication; and to carry out improved tracking management of suppliers . Supports quality monitoring of supplier materials, such as sending quality warning messages if two batches of the same material fail within one month. Supports follow-up business needs to carry out online collaboration and interaction with suppliers, such as confirmation of supplier claim notices and improved collaboration. Provide platform support for supplier quality improvement monitoring. An example of a solution model is as follows:

Based on the supplier management system, several aspects of construction are carried out to optimize the raw material inspection process, improve the supplier's management and control capabilities, build supplier quality files, improve supplier collaboration / interaction, and comprehensively improve the level of supplier management. The development company integrated the six key projects of supplier management into the system, prompting the company to optimize the process from selection to purchase.

1: Optimization of raw material inspection process

Realize the effective connection of the entire process from the incoming inspection to the storage, and export the incoming supplier information (supplier number, supplier name, material number, material name, incoming quantity, etc.) from the QAD system through QIS, and realize Automatic inspection.

The system automatically recognizes the inspection status, sampling quantity and inspection items. After the inspection is completed, the status of the QIS system's incoming inspection results (qualified, special mining, unqualified) is written back to the QAD system, and the warehouse staff goes through the storage formalities. :

2: Improvement of supplier management and control capabilities

Non-qualified suppliers cannot feed;

Dynamic monitoring of incoming quality, beyond the current automatic warning to initiate improvements;

Supplier material certification is more rigorous, and materials that have not been acknowledged cannot be fed;

The materials delivered by the supplier are not within the scope of certification and cannot be charged;

Supplier performance evaluation score monitoring: the evaluation score is lower than a certain target line to automatically initiate an early warning message and submit improvement;

3: Establish traceable supplier quality files

Collect relevant information on supplier management, which can be consulted at any time, and the statistical analysis report can be exported at any time, such as supplier on-site review and introduction of data, on-site audit, monthly supplier evaluation, supplier quarterly evaluation information review;

4: Standardization and controllability of CAR improvement management

Realize the company's quality problem abnormal information data sharing, you can consult any time period, any supplier, any material number, any bad phenomenon information.

Improve the process specification, the improvement process can be tracked, and the overdue warning.

Establish an experience database of quality issues so that experience can be passed on.

5: Build a supplier interaction platform

Provide platform support for improved interaction and tracking of supplier quality issues;

Achieve all communication, requirements, and quality improvement information transfers with suppliers on the platform.

6: Improved customer audit response capabilities:

All the data related to the supplier's quality management are checked and displayed directly in the system and provided to customers for review;

1. Ensure the quality of the company's products, reduce costs, and improve its profitability.

2. Optimize the procurement process, improve the efficiency of procurement operations, and improve the ability of enterprises to respond quickly.

3. With the supplier as the center, through the entire process of evaluation and management of the supplier, establish a qualified supplier database for the enterprise, and automatically associate the basic information of the cooperation unit, historical cooperation, performance, evaluation and other information, through continuous accumulation and Update, realize the cooperative relationship between enterprises and suppliers, upgrade from a single cooperative relationship to a strategic cooperative alliance relationship, and reduce enterprise project operation risks.

4: To achieve the supplier's controllable, manageable and searchable purpose.

5: Improve the project operation ability of the procurement process, and encourage suppliers to not change from "indecision" to "clean".

6: Establish a supplier collaboration platform to provide platform support for improved interaction and tracking of supplier quality issues.

7: Realize the standardized IT solidification of business such as component purchase inspection standards, supplier evaluation models, evaluation methods, and admission procedures.

What Are Vendor Management Systems?

Supplier Management System

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