What is supplier collaboration?
Supplier collaboration is a strategic approach to supplier relationships in which a business actively works with its suppliers to achieve shared goals. The best tools for supplier collaboration have the critical capabilities to support external collaboration.
In external collaborations, independent entities work together to achieve shared goals. Supplier collaborations are external collaborations, and effective supplier collaboration helps businesses and their suppliers achieve mutual benefits like cost reduction, quality improvement, innovation, and access to new markets. In many organizations, supplier collaboration has the potential to create a great deal of value. But what tools can procurement teams and suppliers use to achieve strategic alignment?
Procurement organizations can choose from a number of available tools to support their internal processes. Recognizing that external collaborations require a different approach than work with internal stakeholders reveals that the majority of these tools are not well suited for supplier collaboration.
Remembering that supplier collaboration requires both relationship-building between organizations and practical solutions to facilitate collaboration (see What is supplier collaboration?), the following capabilities are critical functions of supplier collaboration tools.
Considering the prevalence and importance of supplier collaboration in procurement processes like vendor selection, contract negotiation, vendor onboarding, vendor risk assesment, and vendor management, it’s somewhat surprising that the tools most frequently used to support supplier collaboration fall into only a few categories.
Phone calls are generally used for specific, expected, or scheduled communications, while fax, although less common today, is still used for transmitting documents that require signatures when digital signatures are not an option. Despite the decline in their use, 44% of organizations still use telephones and faxes in supplier collaborations.
Despite a total lack of structure and the risks of using email with external stakeholders (and vendors, specifically), 80% of organizations report using email to collaborate with internal and external procurement stakeholders, largely because of its ubiquity.
Video conferencing has exploded in the pandemic/post-pandemic business environment. It has replaced the phone for both internal and external purposes and some face-to-face meetings. Some video conferencing tools offer enhanced capabilities such as AI-based transcription and analysis. Like the phone, it is specifically real-time, but has the added benefit of pseudo-face-to-face communication.
Source to Pay software can be a game changer for procurement organizations, but due to the cost of acquiring and operating strategic sourcing suites, they’re primarily used by large organizations with significant budgets. According to Gartner’s Peer Review website, “Strategic sourcing application suites are a set of related, integrated solutions that support upstream procurement activities; in other words, the strategic work the procurement team does for planning, assessment and performance management. Strategic sourcing application suites are used primarily by companies with $800 million or more in annual revenue that, typically, have the necessary critical mass of spend.” Additionally, they’re often inflexible, imposing so much structure that productivity losses can outweigh the benefits. And, where supplier collaboration is concerned, they still primarily resort to email.
External collaboration tools like TakeTurns are purpose-built for external collaborations, ideally suited for working with suppliers and vendors. They provide a central location where both organizations collaborate (exchange, request, manage, and version) on the documents and files necessary for procurement processes, while also tracking the communications associated with the matters at hand.
Supplier collaborations are a type of external collaboration, and external collaborations require different support than work done with internal stakeholders.
TakeTurns is a purpose-built platform for external collaborations, ideally suited for working with suppliers and vendors. It provides a central location where both organizations collaborate (exchange, request, manage, and version) on the documents and files necessary for procurement processes while also tracking all the associated communications.
TakeTurns also acknowledges that effective supplier collaboration is built on trust, and TakeTurns facilitates this by providing a transparent and secure environment for all interactions. The platform’s features support the relational and pragmatic aspects of supplier collaboration, fostering long-term, strategic partnerships that drive innovation and mutual growth.
Some example uses of TakeTurns in the S2P process:
Effective supplier collaboration offers substantial benefits to both businesses and their suppliers. While the potential value is immense, realizing it requires the right tools. External collaboration platforms like TakeTurns offer a comprehensive solution, providing the necessary structure, security, and transparency to foster strong supplier partnerships. By investing in the right technology to support their strategic approach, procurement organizations can unlock the full potential of supplier collaboration and drive significant improvements in their supply chain operations.
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