Digitalised Vendor Collaboration & Management

Trend Definition 

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

• Essence: Digitised Vendor Management is a platform-based approach between suppliers and buyers focused on digitising inventory management, order fulfilment, and data sharing with the goal of improving vendor relationships
• Impact: It provides possibilities to easily onboard vendors, to increase contract and documentation automation, and to reduce the risks of supply chain disruptions due to a high level of transparency and visibility

Trend Drivers 

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

• Third Party Data: Traditional vendor management cannot consistently assess all information, especially that originating from third parties, leading to increased risks of disruptions and compliance issues
• Increased Complexity: Due to the vast diversification of supply chains and the resulting complexity, vendor management systems require a high level of standardisation and centralisation
• Competitive Pressure: Due to rapid technological advances and industry players integrating these technologies, companies that are reluctant to adapt will face a significant competitive disadvantage

Use Cases 

How to apply this trend? 

• Automated Inventory Management: Enables automated replenishment orders based on supplier inventory data
  Example: P&G utilises Walmart's real-time sales data to efficiently manage its product inventory in Walmart's warehouses, optimising stock levels and ensuring in-time delivery to minimise the risk of stockouts or excess inventory
• Enhanced Data Sharing for Forecasting: Improved demand planning with shared supplier-buyer data
  Example: Cisco Systems partners with its component suppliers based on Oracle and ERP to share demand forecasts with its suppliers, who in turn adjust their production, resulting in reduced time-to-market and order cycle times

Procurement Relevance & Response Strategies 

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

• Process Adaptation: Implement supply chain solutions (e.g., JAGGAER, iValua, or SAP) linked to supplier data, ensuring real-time adjustments to procurement needs
• Strategic Supplier Collaborations: Prioritise partnerships with digitally connectable suppliers to fully leverage benefits of digitised vendor management, aligning procurement strategies with integrated software solutions