Vendor/Supplier Portal Whitepaper - CRMJetty

1. Matching Demand Supply Innovatively Indexing Vendors & Suppliers through Portal for Smartest Management Vision Document

3. Contents Areas to Focus for Better Vendor/Supplier Management 6 6 6 6 6 6 6 6 7 Major areas that demand more attention: Market Intelligence Benchmarking Categorize Sourcing & Support Vendor Master Data Catalogue Management Supplier Management Contract Management Sourcing Event 7 7 7 Procurement Metrics Procurement Help Desk Buying Metrics Lower Costs and Improve Supplier Service with Online Collaboration 7 8 9 9 9 9 A Dedicated Vendor/Supplier Portal Can help Organization in: Hurdles That Vendor/Supplier Portal Overcome Eliminate Routine Inquiries of Supplier Execute Changes in Order Reduce Inventory Requirements with Vendor Managed Inventory & Consignment Support Perfecting the Contract Processing Cycle With Portal 11 11 11 11 11 11 12 12 12 13 13 Enhancing Involvement of Vendors and Supplier with Portal Enabling contract management Contract authorization Contract Negotiation Approving the contract Execution of the contract Obligation management Revisions and Amendments Bettering The Process With Vendor/Supplier Portal Portability Vision Document Vendor/Supplier Portal 3

4. 13 13 13 13 13 13 14 14 Performance Management and Orchestration Security Well-Defined Network Stability Service Continuity Operations Energy Efficiency Migration and Co-existence Benefits of a Streamlined Portal for Vendors and Suppliers Why Vendor and Supplier Performance Management Are Important? 15 16 16 16 16 16 16 Supply chain disruptions Procurement’s visibility into spend on preferred suppliers Collaborating with suppliers to create new value Costs incurred due to incomplete information on supplier relationships Risk to company due to suppliers’ actions or policies Stages of Managing Vendor/Supplier Engagements 17 18 18 18 18 19 19 19 Stage 1: Definition of strategy Stage 2: Evaluation Criteria Stage 3: Collect and Analyze Performance Data Stage 4: Measure, report and share performance data Stage 5: Conduct review meetings: Stage 6: Report and track action points: Stage 7: Review and reset goals Vendor & Supplier Portal Challenges: 22 22 22 22 22 23 23 23 Disparate systems Lack of management commitment for a robust Vendor/Supplier Portal Lack of consistent process across the organization Lack of scorecard s specific to commodity / category Lack of quality information or lack of information at the right time Paucity of time to conduct supplier performance reviews and quality check Lack of mechanism to record review meetings & track action points Vendor/Supplier Portal 4 Vision Document

5. INTRODUCTION In this dynamic and unpredictable world, an organization’s ca- pability to access the right information at the right time holds the key to sustenance and longevity. The suppliers are an im- portant and integral part of supply chain management. Same way, supplier management is also an important part of any or- ganizations’ strategies. Thus, having the right information on suppliers and suppliers’ performance becomes imperative. To have access to this supplier information, organizations need to have the right processes in place facilitated by the right tech- nology, driven by the right people. This requirement of right people, technology and processes are an integral part of any “Platform” offering. So, migration to platforms is a decision in the right direction. Also, this shift to efficient platform offering aids organizations to have an access to valuable information on social media and third-party applications (by linking your data collection points to various 3rd party providers of information like D&B, Reuters, Bloomberg, etc.) and will also help in getting a 360-degree view of the organization's’ performance which is quintessential during these tumultuous times. Therefore, right information at the right time drives long lasting relationships & enables informed decisions, vital for a strategic decision. Vendor/Supplier Portal 5 Vision Document

6. Areas to Focus for Better Vendor/Supplier Management Focus areas in dealing with vendors and suppliers can only be checked when there is an appropriate operating model coupled with solid competency. These two are the founda- tions of effective sourcing and contract management for both; vendors and enterprises. This comprehensive approach helps organizations to minimize order management com- plicacies along with vendor relationship complexities. Major areas that demand more attention: Catalogue Management Enterprises have to pay special attention in main- taining their catalogue information. Maintenance of catalogue data in an efficient procurement information management system enhances the catalogue management process on the portal while streamlining the order processing. Market Intelligence Benchmarking It is necessary for businesses to benchmark sup- plier information along with the their market status information. Such information helps busi- nesses to get a brighter idea about vendors, so they can be managed accordingly. Categorize Sourcing & Support For any organization, it is necessary to categorize their sourcing and business communication with vendors. Prepare sourcing documents, supplier surveys and market research. Evaluation of these analysis helps enterprises to bifurcate the needs, demands and outputs of your vendors. Vendor Master Data To manage vendors in the best way, enterprises needs to maintain a master data for them. This data plays decisive role in identifying new on-boarding suppliers. With this information, the system will accelerate approval, validation and manages all other sorts of data changes. Supplier Management Managing your supplier information along with their supplied products data is the backbone of every system. It helps the organizations in sup- porting, building and managing a well defined channel that maintains key performance data. It also renders broader idea about the system while enabling admin to have a better insight of their suppliers, vendors and their offerings. Contract Management Suppliers and vendor engagement revolves around the contract. Thus it becomes important to maintain the organizational sourced contracts while generating critical reports on renewal expi- ration. Vendor/Supplier Portal 6 Vision Document

7. Procurement Help Desk Building a real time assistance that is capable enough to manage and execute procurement systems is necessity for enterprises. It features as a guidance tool that helps and lead users to work under right policy, process and procedures. Sourcing Event Adding, maintaining, scheduling, and reminding about the latest organization events and stream- ing its information with all the suppliers and ven- dors. It is also necessary that vendors and suppli- ers pay attention to your marketing campaigns and events. Buying Metrics It is crucial for any business to understand buying metrics in any business. For suppliers, the portal must have functionality and features that offer assistance for sourcing, negotiating and pro- cessing all non-catalogued orders. Procurement Metrics Driving system assessment and generating reports that are helpful in the system procure- ment. It assists organizations in analyzing and compiling list of errors and system leakages that consume excessive time along with additional efforts. Lower Costs and Improve Supplier Service with Online Collaboration Phone calls, fax, and emails with suppliers waste time, introduce errors and create latency in your supply chain. Merchant Vendor Portal makes you and your suppliers more efficient with a powerful platform for online collab- oration. It empowers suppliers to access the latest information that includes payment, delivery information and status purchase orders. Portal supported two-way interaction enables suppliers to raise their re- quests, submit their notices, review payments and update their profile data. The portal will also allow them to submit their work confirmations and create online invoices using purchase order details. You get better service, lower processing costs and relief from routine supplier inquiries. So your buying organization has time to focus on what really matters – getting more savings. Vendor/Supplier Portal 7 Vision Document

8. A Dedicated Vendor/Supplier Portal Can HELP ORGANIZATIONIn: • Creating a closed-loop procure-to-pay collaboration with enterprise. • Simplifying order fulfillment and payment at both ends. • Efficiently ramp vendor engagement and maintain suppliers roles. Get improved service, eliminate routine inquiries and even offload inventory management by sharing information with suppliers online. 8

9. HURDLES THAT VENDOR/SUPPLIER PORTAL OVERCOME Eliminate Routine Inquiries of Supplier Repetitive inquiries from supplier are irritating and it can kill umpteen time of your staff. A Ven- dor/ Supplier Portal eliminates the need for them to submit inquiries. The self-service model to access information facilitates them to access any information they want any time. Suppliers can view their orders, access additional associ- ated attachments, and easily print out PDF copies of that. help your suppliers and you streamlined on the same page. The portal will facilitate suppliers to request changes directly through the portal online for any of their requests whether it is for splitting a shipment, modify any order details or to edit quantity, delivery date or supplier number. By defining role specified workflow, enterprises can enable their purchasing team to approve requests automatically. They can also scrutinize some requests that have crucial changes and opt to divert them to appropriate authority. Approved changes will be recorded in the pur- chasing document, listing formal and auditable revisions. With Vendor/Supplier Portal, both sup- pliers and enterprises can access all of the information they need immediately to manage and track changes. Any changes to an order are instantly available on Vendor Portal, with a full audit trail of previous changes. The portal also allows suppliers to access real-time information about purchase agreements, critical work agreements and con- tracts with drill-down access to all associated documents. For orders that were negotiated using Sourcing or Procurement Contracts, suppli- ers can check agreement terms and bind pur- chasing documents with an electronic signature. Following the submission of invoices, enterprises can also track payment schedules to streamline their cash flow. Hence, the whole process becomes more responsive with reduced man- power requirements in an accelerated process. Reduce Inventory Requirements with Vendor Managed Inventory & Consignment Support Vendor/Supplier Portal reduces inventory cost through Vendor Managed Inventory (VMI) pro- cesses that let authorized suppliers manage inventory for you. Access of forecasts, in-pro- cess shipments and on-hand stocks, enable suppliers to initiate replenishments on enter- prise behalf. Execute Changes in Order Management of routine changes burden up Purchasing staff with another drag. A dedicated Vendors/Suppliers portal can manage these supplier-initiated change requests that can Vendor/Supplier Portal 9 Vision Document

10. The software also simplifies consignment relationships for both enterprise and suppliers by providing them visibility of consigned inventory along with transactions that affect it, from procurement to payment. Merchant Vendor Portal data also improves the accura- cy of your planning and scheduling, further reducing inventory. Vendor CRM Vendor Portal - New Vendors - Contracts Management - Procurement - Invoicing & Payment Login User Authentication Validation Contract Management New Vendor Sign Up Service Rating Compliance Metrics Procurement Invoice & Payment History Vendor Not Qualified Vendor Listing Payment Configuration Invoicing Generate Invoices Vendor Notification & Fulfilment Work Order Management Vendor/Supplier Portal 10 Vision Document

11. Perfecting Contract Processing CYCLE WITH PORTAL The main goal of vendor management is to ensure that all contract participants fully meet their expec- tations and obligations while delivering the objectives that are intended from the contract. A vendor/- supplier portal runs operations in two parallel ways at the same time. One part of the portal processing builds good business relationships between the vendors and service or product provider. Another part is, to help organizations manage their contracts proactively in order to anticipate future needs, as well as reacting to situations that arise. Vendor management process through a portal includes the following steps: Enhancing Involvement of Vendors and Supplier with Portal Enabling contract management The very first phase to streamline your enterprise processing begins with contract management. It iden- tifies contracts and verification of roles of vendors and suppliers. A contract management tool also defines roles, responsibilities and procedures for organisations as well as vendors and suppliers. Contract authorization Writing a contract manually in system files is a time-consuming activity. With the use of an automated contract management system, this process becomes quicker, that takes less time and gets streamlined without any error. Contract Negotiation The negotiation process relies much on the completion of the draft contract. With the portal, employees who represent enterprise in the negotiation process would be able to compare all versions of their con- tract. Here, the key note is to ensure that the best available opportunity should be drafted in the contract to both sides. Approving the contract This is the stage where most of the bottlenecks occur when it gets approval form the management. Vendor/Supplier portal helps users to preemptively deal with this by creating a tailored workflow for approval process. This process includes parallel and serial approval methods to keep decisions moving at a rapid pace. Vendor/Supplier Portal 11 Vision Document

12. Execution of the contract Portal comes has the ability to take eSignatures and attach them wherever required. eSignatures help users to execute contracts by allowing users to control and shorten the signature process. Portal also allows to attach eSignatures in emails, fax, sales notes and in other crucial business documents. Obligation management This is one of the most crucial notes where all the key stakeholders have to ensure that deliverables meet in accordance with the contract guidelines. Portal centres the work processing around the con- tract condition and keep the stakeholders in loop with notification, reminders and updates. Revisions and Amendments Portal keeps complete track of start to finish activities that took place under a track. It gathers all the minor details and documents pertinent to the contract’s initial drafting to the finishing note. The system will analyse the complete contract processing, productivity and loopholes to generate an insight report of it. This insight report will work as a blueprint document for amending and revising contract. Vendor/Supplier Portal 12 Vision Document

13. Bettering The Process With VENDOR/SUPPLIER PORTAL The nature of the Vendor and Customer also comes with certain technical challenges that needs to be addressed while facilitating interoperability along with seamless evolution towards a completely virtu- alized networks. The Portal that facilitates vendors and suppliers, has certain requirements. Some of these requirements that need more focus are: Portability While implementing and prospecting organiza- tional operations with any software, it is of utmost importance to scale its feasibility and probability. Address the capabilities to load, execute and move vendor roles and operations across different modules and in some cases, to some data centres too. Security Digitization of enterprise processing can be exposed to external attacks in ways that are not expected. Thus, it becomes utmost important concern to make the portal secured. A well-structured portal unbreachable and protects confidential busi- ness information safe with the portal. makes your data Performance Listing all the abilities of the portal that are required to describe and design the infrastruc- ture requirements for specific vendor and sup- plier performance targets. Well-Defined Network Stability The portal centric assistance has a fundamen- tal need, an well-defined network stability that keeps the data flow healthy and systematic. A stable network prevents the process from crashes and data losses while keeping the infor- mation availability, continuity, functionality in tune without any failure. Management and Orchestration Portal helps users to place requirements for their organizational mechanisms to orchestrate and manage infrastructure resources, different operations performed on those and software functions lifecycle. Operations Target the major requirements that are needed to automate the operational functions of an enterprise. This includes network systemizing vendor/supplier activities, efficient data sharing, classification of roles, quick ticket generation and response to these tickets, and all other operational functions that can be handled by the portal. Service Continuity From starting of the portal capabilities that are needed for continuous delivery of services in conformance with the service specification and Service Level Agreement requirements. Vendor/Supplier Portal 13 Vision Document

14. Energy Efficiency A Portal must address technical capabilities that can minimise the energy consumption and human interventions. It is important to develop an efficient technology based environment that works beyond convention and more on configu- ration while reducing cost as well as efforts of the organizations. Migration and Co-existence A Portal must address technical capabilities that can minimise the energy consumption and human interventions. It is important to develop an efficient technology based environment that works beyond convention and more on configu- ration while reducing cost as well as efforts of the organizations. Benefits of Vendor Portal Portal helps build a It also prevents data loss and systemize information sharing. progressive and beneficial Set up criteria for new suppliers on-boarding and have an approved supplier list. relationships with suppliers along with vendors while Create Realistic SLA based on previous performances. driving a continuous loop of Rank Suppliers and vendor according to their performance. new oportunities with impro- vised system process. Identification of new leads and explore them for new sources of supply. Analytics Insight to identify process loopholes. Vendor/Supplier Portal 14 Vision Document

15. Benefits of a Streamlined for VENDORS & SUPPLIERS PORTAL A well designed portal automates process like identification of vendor id, stock details, product codes, catalogue details. It also prevents data loss and systemize information sharing. It will drive the set-up of criteria for new supplier on-boarding and have an approved supplier list. Portal Assists in creating realistic SLAs (Service Level Agreements) into supplier contracts that are based on past performance infor- mation gained from the portal. It drives rationalization of suppliers based on performance infor- mation i.e. disengage with low performers and high-risk suppliers whilst giving more business to high performers A Vendor, Supplier Portal can lead to identification of new sources of supply with its Analytics insights that help suppliers improve their performance by reducing costs and risks. Portal can create preferred or certification badges for vendors that encourage them to go more active and generate good output. 15

16. Why Vendor and Supplier Performance Management Are Important? Top drivers that escalate the importance of dedicated portal for supplier and vendor are: Supply chain disruptions It is a key role player in know- ing the enterprise chain, the possible disruptions & viable mitigants in place. This is possible only by know- ing your suppliers better. A vendor/supplier portal helps best to have a better insight of your vendors or suppliers with analytics. Risk to company due to suppliers’ actions or policies Procurement’s visibility into spend on preferred suppliers This is very important infor- mation as this helps in making strategic supplier & supply decisions. the science behind grouping suppliers as pre- ferred or favored. supply In milieu contracting with the right suppliers is key & any slip could lead to unnecessary & uncalled for litigations or legal hassles, therefore it’s import- ant to know with whom you are doing business with. this dynamic business Costs incurred due to incomplete information on supplier relationships In today’s very competitive environment, lack of timely information can have huge impact on costs as informa- tion drives strategies & deci- sions. Like in any relationship it's sometimes very hard to calculate the cost of a wrong decision as trust & commit- ment is lost. Another driver which is inter- nal to the company is the area wherein the organization can improve to help the sup- plier to deliver and exceed the expectations viz. a 360 degree feedback for the organization. Collaborating with suppliers to create new value It’s very important to con- stantly collaborate with the suppliers in a healthy atmo- sphere as suppliers’ progress could mean organizations’ progress. Co-creation is the new mantra for smooth and efficient fulfillment. Vendor/Supplier Portal 16 Vision Document

17. STAGES OF MANAGING VENDOR/SUPPLIER ENGAGEMENTS Vendor/Supplier Portal 17 Vision Document

18. Stage 1: Definition of strategy The process begins by strategizing the Vendor/Supplier Portal is with the contracted details like sup- plier information, category, commodity procured, relationship with supplier, past performance, etc. Even though the general process for Vendor/Supplier Portal is decided at the organization level with deviations/exceptions are recorded/documented. The tools/applications that will feed data for Ven- dor/Supplier are also decided at this stage, eg: which tools will provide information on Quality per- formance (i.e. rejection rate from P2P tool or survey responses), etc. Best practices suggest following a separative approach i.e. conduct performance management for the 20% of the total supplier base which usually constitutes 80% of the total spend. Stage 2: Evaluation Criteria This stage is all about the evaluation criteria are defined i.e. defining the supplier status. The status criteria are usually defined according to the category or commodity. It also requires that exceptions to their general needs are documented/recorded. Best practices: Suggest to make the requirements metrics more potent that they should ideally be aligned to the organization’s own goals, objectives and strategies than when copied from other organizations. Also, the supplier has to be measured against the terms & Conditions agreed in the current contract with the supplier. Stage 3: Collect and Analyze Performance Data As per the strategy and evaluation criteria that are addressed above, suppliers’ performance is col- lected from different sources/applications, scorecards, surveys, etc. Post collection of the data, it is analyzed for appropriate and accurate reporting. Best practices: It’s very good practice to solicit suppliers’ feedback on organizations’ performance (360 degree feedback). Supplier performance can take the form of either a survey questionnaire or interview (preferably face-to-face), sometimes even a site visit, and includes appraisals of various aspects of the supplier's business including capacity, quality adherence, financials, organizational structure and processes and performance. Stage 4: Measure, report and share performance data In this stage, the data collected in the above step is measured and reported in the appropriate formats to be shared with the appropriate audience. Here, the key aspect is the mapping of the reports / information to the people. An effective and efficient process of generating reports/ and analytics information by templatization of these reports. Here data mapping with the end users works as a productive good practice. Vendor/Supplier Portal 18 Vision Document

19. Stage 5: Conduct review meetings: In this stage, review meetings are conducted with the supplier as per the strategy defined earlier. The review meetings are done periodically i.e. once a month, quarterly, half yearly or yearly depend- ing on the strategy. The agenda of these meetings include, discussion on past performance on vari- ous parameters, action points from previous review meetings, areas of improvement, support needed to drive improvement projects, etc. The attendees of these review meetings are usually the vendor managers, suppliers’ representatives, key users of suppliers’ products or services, team involved in procurement, finance, quality, category managers, etc. Stage 6: Report and track action points: Here, the action points from the review meetings are recorded and tracked for completion or tracked for improvement. The minutes of the meeting are also clearly documented for future refer- ences. Key point here is the mutual agreement of these crucial action points. the action points have to be very clear and well defined, the below given table is an example of how to document the objectives or action points. Stage 7: Review and reset goals At this stage, the action points or objectives are reviewed against the targets and the goals are reset if needed. Here it’s important to note the support the organization needs to extend to the suppliers to meet their goals. This is a very important stage as it gives an important insight into the suppliers’ ability to improve their performance and shows the suppliers’ intention to deliver or exceed expectations. The outcome of this assessment will have an impact on various decisions taken at different levels of the organization. Like for poor performance - it might result in reducing the business given to that sup- plier and for a very good performance - it might result in increasing the business. Vendor/Supplier Portal 19 Vision Document

20. CRM Supplier or Vendor Supplier/Vendor Portal -New Suppliers -Supplier Rating - Procurement - Inventory Updates - Warehouse Updates Login User Authentication Validation Procurement New Supplier New Supplier Sign Up Re-Submit Quote Req Sent to Applicable Suppliers Suppliers Notified Quotes Sent by Suppliers Supplier QA Failed Supplier Sampling & QA Validation Rejected Quotes Ranked as per Supplier Rating Config Procurment Team Notified Approved Supplier Rating Configuration - Location, QA Rating, Fulfilment History, Rates, Stock Availability, Rates Metrics Low Inventory Flag Received from Warehouse Management System Supplier Listing Order Confirmed Quote Approved PO/WO Sent Invoicing Payment Config. Shipment Recieved Warehouse Updates Warehouse Assigned Stocks Approved Stock & QA Validation Shipment Received Shipment Sent Order Tracking Stock Return Dispatched Stock Rejected Rejected Replacement Inventory Mangament Return Received Credit Memo Generated

21. Vender Portal Outflow (Supplying to multiple Entities) CRM Manufacturer & Distributor User Login Validation Authentication New Order Returns Requirement Management Fulfilment Quote Sent If eligible Replacement / Changes Stocks Rejected Rejection Approval Stocks Approved Purchase Order Receiver's QA Consigment Dispatched & Order Tracking Consignment Delivered INVOICING invoice & Payment Configuration Return Processed To Repairs To Remanufacturing To Recycle To Polishing Credit Memo to Resend If Not

22. Vendor & Supplier Portal Challenges: The key challenges organizations encounter to implement a robust Supplier Performance Management are: Disparate systems This arises from having different systems for various activities like Pr, PO, invoicing, reporting, etc. It will impact the collection of data for analyzing suppliers’ performance. Likely Solution: A technology offering/ solution that cuts across the sourcing & procurement lifecy- cle with real time reporting Lack of management commitment for a robust Vendor/Supplier Portal This stems Vendor/Supplier Portal at the bud, thereby impacting the whole Vendor/Supplier Portal process. Likely Solution: Management’s commitment at all levels of the Organization is very essential to the success of Vendor/Supplier Portal, as the suppliers’ performance information is collected across. Therefore, the more detailed & accurate the data is, the better is the analysis resulting in the Best Vendor/Supplier Portal & review Lack of consistent process across the organization It only makes comparisons more effective which in turn helps in making informed decisions. Likely Solution:The Vendor/Supplier Portal process has to be made very easy & flexible, yet effective & consistent so that it can be implemented across the organization, hence the need to align the need to Organizations own goals, objectives and strategies than when copied from other organiza- tions. Lack of scorecard s specific to commodity / category This also makes comparisons more effective and makes the organizations take the ‘horses for Courses’ approach, as drivers or measurement yardsticks for different commodities, categories are unique & different. Vendor/Supplier Portal 22 Vision Document

23. Likely Solution: Even though the process of Vendor/Supplier Portal has to be consistent, the param- eters to measure the performance has to be specific to commodities, categories. e.g. timely delivery is a necessity for goods, timely completion is a necessity for services. Lack of quality information or lack of information at the right time Either of these will distort the fact and bring down the decision-making ability. Likely Solution: It’s essential to have a well augmented process & technology in place to ensure data is collected regularly & accurately, even if it means real time or in person in some cases Paucity of time to conduct supplier performance reviews and quality check This is due to lack of efficacy and efficiency of the Vendor/Supplier management process that leads to unproductive supplier review meetings. Likely Solution: The need for a well-augmented process & technology driven solution that shortens as well as smoothens the data analysis, data collection & information compilation lifecycle. Lack of mechanism to record review meetings & track action points It removes the sting out of the purpose of having goals in Vendor/Supplier Portal as there will be no clear objective or purpose or agenda to drive these meetings. Likely Solution: It’s not only important to have a well augmented process & technology solution for collecting data/ information, it’s equally important to have one for recording the review meetings & tracking action points for completion. Vendor/Supplier Portal 23 Vision Document

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