Data-led Supplier Evaluation

Trend Definition 

What is the essence of this trend? What is its impact? 

• Essence: Data-led supplier evaluation in procurement collects and analyses quantitative and qualitative data on supplier performance, reliability, cost-effectiveness, pricing, delivery times, and quality
• Impact: More traditional procurement methods are replaced by introducing a more objective, data-driven approach that leads to more efficient supplier and procurement management, improved decision precision, and cost optimisation

Trend Drivers 

Why is this trend emerging now? What’s changing? 

• Big Data in Procurement: The growth of big data across industries has provided procurement departments with unprecedented access to detailed supplier information, including both traditional (costs, delivery times) and new (economic and political risks, markets trends) dimensions
• Heightened Need for Supplier Resilience, Flexibility, and Compliance: The COVID-19 pandemic and subsequent supply chain disruptions have shown the importance of supplier resilience, necessitating suppliers that can adapt swiftly to changing market conditions

Use Cases 

How to apply this trend? 

• Real-Time Performance Monitoring: Easy monitoring and steering of suppliers 
  Example: JAGGAER enables Procurement departments to automatically track data-based delivery timelines, quality of products, and overall supplier reliability and compliance, facilitating better-informed sourcing decisions 

Procurement Relevance & Response Strategies 

How should Procurement adapt its Processes, Organisation, and Strategy?

• Define and Implement Evaluation Criteria: Define traditional and new criteria to evaluate the fit of suppliers and then implement these in the procurement system
• Proactive Risk Management: Build a risk management framework that integrates data analytics to identify and mitigate supplier-related risks proactively. Develop compliance monitoring systems to ensure suppliers adhere to regulatory standards