Supplier Enablement

IOS – Integration of Suppliers

When you think about your suppliers today do you think of them in terms of being “integrated” into your business?

In some industries it is true that suppliers are integrated into the supply chain otherwise Just In Time replenishment of inventory would not be possible. The integration of suppliers in this case has the impact of reducing inventory that is carried with the benefit of reducing working capital requirements of the business. Big benefit!

But for the majority they might think of integration in other terms, for example:

We have agreed preferred pricing

We have a Service Level Agreement (SLA)

We have preferred suppliers

We have been doing business with them for years and years

How would you allocate a benefit in this case? There is always someone who is prepared to deal on price or negotiate a better SLA to earn your business.

What is the cost of your doing business with a supplier? In an earlier blog we know there are costs and some of those costs are unnecessary as a result of the inefficiencies that exist in the “doing business”. We accept the world is not perfect but how many examples can you think of where you know well that the methods you use to conduct your business with suppliers is wasteful of time and resources?

With IOS you seek to take out those inefficiencies and the associated cost for you and your suppliers.

Where are these inefficiencies?

Many are looking at their purchase to pay (P2P) cycle.

In your suppliers’ business that is the order to cash (O2C) cycle.

Here you would look for IOS to optimize your P2P cycle where this also had benefits to a supplier's O2C cycle.

It has to be a win – win.

Click here for more information about IOS.

posted by FrankB @ Tuesday, August 01, 2006