09 February 2023
In today’s ever-changing supply chain landscape, effective communication with suppliers is essential for successful collaboration and efficient supply chain operations, especially in the demanding field of end-to-end purchase order (PO) communication.
When trying to set up an efficient supplier collaboration environment, you may encounter various obstacles along the way. These obstacles can hinder the flow of information, delay order processing, result in late deliveries and production line stoppages, suppliers' performance, and impact overall operational efficiency.
These barriers may include language, cultural and time zone differences when dealing with a global supplier base, technological compatibility issues, lack of transparency from suppliers, limited communication channels, and poor supplier relationship management.
Acknowledging and addressing this obstacle is the first step to building a reliable supplier collaboration environment. Effective communication with your suppliers plays a vital role in supplier collaboration as it ensures that both parties have a clear understanding of each other's expectations, requirements, and deadlines.
Furthermore, Efficient End-to-end PO communication allows for smoother order processing, reduces the risk of errors and delays, and fosters a mutually beneficial relationship between buyers and suppliers.
Overcoming these obstacles requires proactive communication strategies, clear expectations, appropriate technologies, and a commitment to building strong relationships with suppliers.
Before embarking on the PO communication and collaboration process, it is essential to set clear expectations from the beginning. Clearly communicate your requirements, specifications, and timelines to the supplier. This helps avoid misunderstandings and ensures that everyone is on the same page. Supplier training, onboarding, and guidance in every step of the way – will help facilitate continuous interaction with suppliers and boost supplier collaboration. The benchmark of monthly supplier collaboration is around 70-75% supplier monthly participation, with non-conforming suppliers receiving regular reminders to participate in the process.
Online collaboration tools are an excellent way to facilitate effective communication between buyers and suppliers. These tools provide a centralized and secure platform for teams to collaborate, ensuring that everyone has access to the information they need. Online collaboration tools help minimize communication gaps, improve responsiveness, and enhance overall efficiency in PO communication. The most productive online collaboration tool for powering supplier collaboration is a supplier-friend web-based portal.
A supplier-friendly portal creates an open, easy-to-use, secured web-based channel that enables continuous access, communication, and transparency between suppliers and procurement and supply chain management teams, with an unmatched level of real-time collaboration, visibility, and traceability. Enabling a secure and efficient work environment means that suppliers can log in, with no installation required, from anywhere at any time. They can easily view all relevant po’s data from contractual dates, need dates, Kanban and VMI signals and 36 month forecasts and provide updated information regarding open orders, and manufacturing processes including progress on production lines, delivery commitment dates, current stock levels, and shipment details. If a shipment is expected within a pre-defined shipping window, the supplier can create advance shipping notices, upload various files, and initiate a fully paperless process – generating a digital barcode which is scanned at the receiving dock, with the ERP updated automatically.
It is important that a supplier portal can be rapidly integrated with any ERP system, and allows the incorporation of hundreds of suppliers. The portal should receive inputs in any digital format from the ERP, continuously transfer this information to it’s database, validate the information, update all stakeholders, and send confirmations back to the ERP. The portal can be used by suppliers in various ways: manually, semi-automatically or fully automatically.
In conclusion, effective communication channels are the cornerstone of successful supplier collaboration, specifically when it comes to end-to-end PO communication. By setting clear expectations, defining a clear onboarding process, leveraging online collaboration tools and utilizing supplier portals, supply chain teams can establish robust channels for end-to-end PO communication with suppliers.
Invest in effective communication channels to optimize your supplier collaboration environment, reduce costs, gain control over inventory, mitigate risks, eliminate late deliveries and production line stoppages, improve suppliers' performance and overall operational efficiency and facilitate continuous interaction with suppliers.