Traditionally, the vendor master file, existing in all ERP systems, was used to house supplier payment data. Suppliers were added upon request, compliance documents were submitted by mail, and banking information was confirmed with a phone call and letterhead. The accounts payable department was the primary user of this data source; governance was often narrowly focused with simple ERP-based functionality.
However, past five to 10 years have seen the emergence of supplier information management (or “SIM”), with organizations taking a broader and more strategic look at the information they gather on their supply base and how it is managed and accessed.
Thus, along with the technology used, the process of bringing a new supplier into the supply chain has evolved from gather basic supplier payment details to more holistic supplier lifecycle management.
This report from The Hackett Group emphasizes on the changing technology for managing supplier lifecycle and also highlights the following important points:
- Cross-functional collaboration (supplier, accounts payable, treasury, R&D, operations)
- Supply base strategy
- Supplier lifecycle risk management
- Supporting working capital objectives