October 22 - 23, 2018
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How Emerging Technology Can Improve Strategic Supplier Discovery
Procurement and sourcing functions in today’s competitive enterprises are rapidly evolving. While it’s true that procurement continues to be measured on how efficiently and effectively costs can be driven down (or even out), today, it is tasked with performing a much more strategic role that goes beyond cost containment and purchasing administration.
Increasingly, along with ensuring reliable and responsibly-sourced supply (at the lowest possible cost), procurement is looked upon to select best-in-class suppliers of goods and services, and to build key relationships with partners that contribute to strategy, innovation, collaboration, and differentiation. In short, procurement’s value proposition is broadening. But this means that processes need to evolve as well – especially when it comes to identifying and qualifying potential suppliers. What’s required is a strategic sourcing model that has the power to maximize the agility of people and processes.
In the pharma sector, where the specialized nature of the supply chain and pressure for timely delivery are key factors in forming trusted supplier partnerships, creating a highly efficient procurement operation means finding suppliers that are able to satisfy requirements beyond cost savings. As a result, existing processes must be reviewed and, where necessary, streamlined. A crucial factor is the time the supplier discovery process takes – processes that are inefficient or too time-consuming can delay the creation of value for internal stakeholders and significantly impact operational health. While accelerating discovery processes remain critical, however, so too does the need to continue to identify suppliers that fit acutely-defined needs; what cannot happen is for teams to make hasty decisions in their selections, potentially sacrificing overall impact for the sake of shortening supplier discovery cycles.
Challenges and Trends in Supplier Discovery
Procurement’s ability to create value – not simply reduce spend – is now widely recognized at executive level and in the marketplace. But the process of identifying suppliers with the experience and capabilities to match specific needs is often slow and arduous. In a recent ProcureCon Pharma report, produced in association with tealbook, a survey of 40 procurement specialists in the biotech and pharma industries found that 83% estimated that an initial supplier search could take between one and six weeks, meaning that the subsequent proposal or bidding process can last for months.
How are these searches being conducted? Well, the survey revealed 70% of participants citing that they preferred supplier recommendations that came from internal peers, saying that they believed this to be the most reliable and credible source of supplier intelligence. But the collecting of this information requires lengthy, ad hoc phone calls, appointments, and numerous email exchanges, none of which are particularly efficient, not least because many don’t subsequently amalgamate and store this valuable information in a centralized location.
Other sources of supplier information identified by participants were internet searches, and external resources such as magazines, trade publications, and conferences. The vast majority of respondents said they shared information with internal partners in-person (78%) and through email (70%) – though only 25% said they used online portals.
Technology for Improved Management of Supplier Information
Clearly, there is much need for current supplier identification and vetting processes to be accelerated and improved. The inefficiencies that exist largely revolve around the fact procurement and sourcing professionals need to gather and synthesize information from many different sources, which can take weeks. However, technology platforms are now emerging that allow for the management and distribution of supplier information that can both simplify the discovery process and expand the pool of potential suppliers falling into radar.
One such platform comes from tealbook – a company which is working to help procurement in biotech and pharma organizations streamline supplier discovery processes. An intuitive cloud-based supplier knowledge management platform, tealbook allows users to instantly access over a million pre-selected suppliers in their search for qualified prospective business partners. The tealbook platform is designed to centralize information and instantly connect supplier capabilities with specific requirements when needed. Users also have the ability to connect with colleagues, and for procurement to receive alerts when internal stake holders have a supplier need – which means that procurement professionals are able to engage sooner in the process.
Mary Kachinsky, Vice President of Strategic Sourcing and Operations for FORMA Therapeutics and tealbook Advisory Group member, says that supplier knowledge management platforms are key to improving efficiencies in supplier discovery.
“One of the challenges that I think Procurement experiences is the ability to share all of the knowledge that sits in pockets across the organization, whether it is with a stakeholder, or a category manager, or a sourcing/procurement individual,” said Kachinsky. “That’s why when I really began to look into tealbook, I felt that it was a tool, a resource, that could help procurement across all industries. It’s really not even specific to biotech or pharmaceuticals, but any industry, in that it provides the ability to store and collect all of this information pertaining to suppliers that all stakeholders as well as the procurement organization can tap into.”
The Need for In-demand Access to Supplier Information
Having an efficient procurement process that saves time and ensures that suppliers are chosen for their abilities to contribute to operating effectiveness and innovation are of course in every company’s best interests. In-demand access to supplier information would vastly improve procurement efforts across the board, as it means that processes that have historically taken weeks could be completed in a matter of minutes. Investing in technology that supports these abilities will ensure that the new strategic role of procurement can continue to flourish, and that its impact continues to grow in line with the needs of the organization as a whole.
The last word goes to Mary Kachinsky.
“One of the key elements that has evolved in procurement is that we are now recognized as having what I call a ‘seat at the table’ with senior executives. The value creation that we have been delivering and continue to deliver to an organization, the ability to identify the providers that can deliver solutions at a high-quality level is the most important element, and we’re looking at relationships and partnerships with these providers.”
Supplier discovery is set to be a hot topic at this year’s ProcureCon Pharma conference, taking place this October at the Westin in Philadelphia.
Be sure to download the ProcureCon Pharma 2017 Agenda for more top insights and challenges facing the industry today.