Supplier Risk – Why is it so difficult to manage the information on different suppliers but essential to comply with legislation?

In an ever-evolving business environment, companies are always struggling to navigate the playing field with competitors, suppliers, customers and legislature. Managing supplier relationships is a crucial component of navigating the order external factors successfully. In the pursuit of efficiency, cost savings and sustainability companies often find themselves relying on a vast network of suppliers to get the job done.

While managing direct suppliers is challenging enough in and of itself, when you go a level or two deeper to tier 2 and tier 3 suppliers, relying on the information provided comes with inherent risk. Risk that can impact everything from operational continuity - through supply chain challenges, quality and cost – financial stability and a company’s brand reputation.

To stay one step ahead of all of these challenges, many businesses are turning to Supplier Relationship Management tools – also known as SRM systems. These systems are recognized as essential tools for optimizing supplier interactions, forging stronger relationships and more importantly – proactively recognizing and managing supplier risks.

Understanding supplier risks

Supplier risks is a broad term, and it can manifest itself in many different forms and stem from a number of external factors such as geopolitical uncertainties, economic turmoil, natural disasters, environmental challenges and continually evolving legislature. Any of these external factors could disrupt your suppliers’ ability to provide the goods and services your company needs, and disrupt your supply chains. Many companies have set up redundancies within their supply chain, so that multiple suppliers are providing the same goods and services, making these companies like vulnerable to supply chain disruptions – however, if you do not have a strong SRM system in place, which can make you aware of impending risks and alert you to immediate threats, your business might still be too late to react to supply chain changes.

Additionally, internal factors like financial instability, quality issues within the production environment and delivery delays can pose big risks to the supply chain of your business. Successfully managing all of these potential internal and external risks, requires a strong strategic and interconnected approach to supplier management.

The role of Supplier Relationship Management systems

Supplier Relationship Management systems are emerging as key drivers and tooling for organizations in the pursuit of effectively managing complexities connected with supplier risk and supply chain challenges. Supplier Relationship Management systems are designed to streamline the procurement process, enhance communication and strengthen the bond between businesses and their suppliers. Let us explore some of the benefits from Supplier Relationship Management systems, and how they can be a powerful tool for your business.

Real-time Visibility

Supplier Relationship Management systems provide real-time visibility into your entire supply chain, which allows your organization to identify potential risks before it is too late. By leveraging advanced analytics, businesses can enhance their insight into several aspects of their relationships with each supplier, such as overall performance, financial stability and compliance with regulations and quality standards. All of these combined insights help to empower a well information decision-making with your business.

Automated Supplier management and Information Flow

By automating the information gathering process for all suppliers within your supply chain, you will achieve higher levels of efficiency, by triggering supplier information updates in due time ahead of any information expiring, as well as saving internal resources in the form of financial resources and personnel, who can now rely on reports from the system, while adding more value in order parts of the business.

By having a Supplier Relationship Management system request updated information and data from your suppliers, before deadlines are exceeded – means that your supply chain can continue running smoothly, allowing your staff to focus on additional value-added tasks within your organization.

Advanced Reporting

By centralizing all supplier information within a Supplier Relationship Management system, your business is able to maintain a comprehensive and up-to-date supplier data base. By using a solution like Pulse from Myneral, where all of the supplier information is recorded on a private blockchain as a part of the Supplier Relationship Management system, you will have access advanced reporting tools, based on immutable data which helps to ensure quick access to critical supplier documentation and data at any time, while also facilitating faster and more precise decision-making based on accurate risk assessments.

Complex audits taking weeks of preparation will become a thing of the past, since all of your supplier data will be managed and stay current at all times, so requests for audits are managed triggering streamlined reports of the desired supplier data points and certifications, in the format of your choosing. Complex and strenuous audit processes could be but a distant memory for your business, if you join us on this journey.

Performance Monitoring

Supplier Relationship Management systems allows organization to easily set and manage key performance indicators for all suppliers, and provides the tool need to systematically track supplier performance against the KPI benchmarks. Regular performance assessments help to identify early warning signs of potential supplier related issues. This in turn, enables quick and proactive actions of risk management, and helps to forge a strong culture of continuous improvement in the relationship between your business and your suppliers, through shared portals and secure communication channels.

Enhanced Due Diligence

All of these above-mentioned features enable your business to stay one step ahead in your quest to mitigate supplier risks within your business’ supply chain. Pulse by Myneral helps you to establish a solid foundation for your supplier management arm of your business. The system facilitates collaboration between your business and your suppliers and opens up for collaborative risk strategies to be deployed within your organization. This will ensure that both parties are actively engaged in addressing potential challenges and issues before they escalate into actual threats.

We also enable you to capture your suppliers’ sustainability data within our Supplier Relationship Management system. We are able export this information directly into your own software solutions, or share it directly from our other Myneral software solutions. This capability takes your ability to forge strong relationships with your customers and consumers to the next level, and helps to set your organization apart from the competition.

Technology

Our solutions are built on blockchain technology, and the same goes for our Supplier Relationship Management program Pulse. We provide our customers with access to our web-based app Pulse. From here, businesses can register their suppliers with us, and our system explores publicly available and accessible databases, while recording the relevant information for your selected suppliers. Any business can then invite their suppliers to access the platform and upload information, documentation and questionnaires onto their private profile within your blockchain-backed Supplier Relationship Management system.

We store all of the information on your own private blockchain, so that both current and historical information can be audited easily and conveniently at any time.

The ability to apply collaborative risk strategies within your supply chain based on our blockchain technology, also has the added benefit of reducing the risk of contractual disputes between your business and your suppliers. The collaborative and automated compliance capabilities of our Supplier Relationship Management tool, ensures that both parties adhere to all agreed-upon terms of your commercial agreements.

Legislation

In the world of business today, there are several regulations and initiatives that emphasizes the need for enhanced due diligence where an effective Supplier Relationship Management solution would be highly beneficial.

The EU Timber regular prohibits the placement of illegally harvested timber and timber products on the EU market. Companies must do their utmost to mitigate the risk of sourcing illegal timber. This requires comprehensive traceability and verification processes within the active supply chains.

The Rainforest Alliance provides certification for agricultural products, ensuring they meet environmental and social sustainability standards. Companies seeking certification must document and demonstrate their compliance through an enhanced due diligence process, as it relates to biodiversity conservation, worker rights and community well-being.

Fair Trade Certification focuses on ensuring fair labor practices, fair prices and social sustainability in the production of goods. Businesses seeking Fair Trade certification must conduct and document their own due diligence in order to demonstrate compliance with these ethical standards.

Conclusion

In a complex and evolving global business landscape, managing supplier risk is more important than ever. It is not just a box to tick on your compliance sheet, it is an critical and necessary strategy. Supplier Relationship Management systems offer a holistic and proactive approach to supplier management, empowering businesses to navigate the intricacies of supplier relationships, while addressing potential supplier risks before they escalate.

As businesses recognize the importance of resilient and collaborative supply chains, investing in Supplier Relationship Management solutions becomes a natural and necessary next step in the quest to ensuring long-term success, stability and growth for your business.

In a time where adaptability is synonymous with survival for thriving businesses, Supplier Relationship Management solutions stands as the guiding light, helping organizations through turbulent times when it comes to supplier risks, when it comes to sustainability and resilient business operations.