Supplier management can make or break an organisation’s cost optimisation and operational efficiency. Unfortunately, an outdated supplier management process can lead to poor visibility, inconsistent supplier quality, difficulty juggling multiple suppliers, delivery delays and other negative experiences for organisations.
Conversely, a modern, optimised supplier management process can help organisations control costs, decrease risks and maintain healthy vendor relationships and performance. To that end, here’s how to enjoy supplier management success in 2025 using the latest and greatest strategy and tools.
What is supplier management?
Supplier management is the process of evaluating, selecting and managing an organisation’s suppliers. Organisations should ensure that suppliers meet or exceed expectations for performance, quality, transparency, cost and delivery. Regular communications with suppliers, assessments and financial analyses can keep the supply chain and supplier relationships running smoothly – enhancing organisations’ daily operations and offerings.
Here’s how to optimise supplier management in 2025
A modernised supplier management strategy focuses on building partnerships with suppliers through data-driven insights, simplified collaboratio, and process automation. Let’s review some tips for optimizing supplier management in 2025.
1. Choose your tools
It might be the last thing you want to hear, but you can’t get by in 2025 and beyond without at least considering investing in supplier management software solutions. You should consider the following solutions with evaluation criteria, cost analysis, buyer guides and demonstrations.
E-procurement software: a web-based solution for submitting and managing purchase orders, automating approval workflows, and tracking supplier invoices and other associated documents with ease.
Contract management software: another web-enabled solution that streamlines the creation, negotiation, auto-redlining and lifecycle management of supplier contracts with automated alerts and reminders.
Supplier relationship management (SRM) software: a central platform for managing supplier data, relationships, performance and collaboration.
For maximum efficiency and centralisation, select a solution that serves as a one-stop-shop for supplier management, eProcurement, and contract management.
2. Strategically source suppliers
To strategically source suppliers, you should actively seek out new ones and negotiate favourable terms. You can streamline competitive bidding with online, automated bid advertisements. Your organisation can also retain a competitive and organised environment with reverse actions, requests for quotations (RFQs), surveys/questionnaires, and supplier rating and scoring cards to categorise suppliers based on their criticality to your business.
3. Incorporate sustainable supplier relationships
Incorporating environmental and social considerations into your supplier selection and evaluation processes allows your organisation to build more sustainable supply chains and mitigate risks associated with unethical practices. Additionally, sustainable supplier relationships will positively impact your brand reputation, while some stakeholders expect sustainable supplier relationships as well. Overall, you would be contributing to broader environmental and social goals.
Some ways of ensuring sustainable supplier relationships include:
- clearly defining sustainability criteria such as carbon footprint and labour standards
- conducting thorough assessments of potential suppliers with questionnaires, ratings, and scorecards (features of eProcurement software)
- establishing KPIs to monitor sustainability goals over time (you can use reports and dashboards in contract management software)
- engage with suppliers to discuss sustainability challenges and solutions on a centralised collaboration gateway
4. Manage supplier performance and development
You should continuously monitor and evaluate supplier performance against key performance indicators such as quality, delivery, time and cost using ad hoc reports and dashboarding tools. Additionally, you can collaborate with key suppliers to improve their capabilities and processes via training resources, technical assistance and joint innovation initiatives.
5. Proactively manage supplier risk
You should be using tools to proactive identify potential supply chain disruptions. From there, you can implement strategies to minimise risk and risk exposure. Contract management software allows you to map risk variables on a risk assessment matrix to measure and visualise risk and risk exposure. Additionally, you can utilise risk usage scores to see to what degree your team is using the risk management tools available to them.
Proper supplier information management and supplier lifecycle management can result in better relationships with suppliers, cost savings and long-term operational success. In an increasingly complex business landscape, it is more important than ever to optimise procurement processes and assess supplier fitness effectively while maintaining strong relationships.
Wouldn’t it be great to have the above mentioned contract management and eProcurement strategies and features for supplier management all in one place? You can enjoy all the strategies and features mentioned above and many others on a centralised platform today.
If you’re interested in how the functionality mentioned above can benefit your organisation and solve your challenges, book a free demo of our award-winning contract lifecycle management solution – Contract Insight – today.
Contact John O’Brien, CEO at Four Business Solutions – global business consultants and software integrators specialising in business process improvement.
