What is supplier management?
Supplier management plans, controls and organizes the relationships between a company and its suppliers. This makes the supply and value chain more efficient and reliable.
Supplier management is primarily a task of the purchasing department. Through systematic supplier management, future suppliers are to be found and existing suppliers strategically aligned and bound to the company.
Supplier management takes place in several stages and essentially consists of the following functions:
- Supplier search
- Supplier evaluation
- Supplier development
- Supplier integration
- Supplier controlling
The importance of supplier management
Supplier management is an increasingly important task, especially as companies become more dependent on suppliers. In recent years, natural disasters and wars have repeatedly shown how dependent industry is on external companies. If a supplier fails, entire supply chains are at risk. In some cases, suppliers contribute 70 percent of a producer's output.
