Top 3 Benefits of Prioritizing Supplier Data Transparency

In an era of big data, data transparency has become a term used to describe the ability for businesses to access and use their own data. However, this concept is widely overlooked and poorly executed within procurement teams and supply chains worldwide. Procurement as a whole is still majorly driven by manual processes and non-digital data logging and monitoring. As a result, project completion is at the mercy of how well companies can manually process their data to make decisions, which often leads to project disruption and lack of trust within supplier relationships. In this new era, procurement leaders should take advantage of new digital methods to improve internal data transparency in order to improve supplier relationships, better manage their own risk exposure, and improve productivity.

1. Improved Supplier Management

The first benefit of supplier data transparency is improved supplier management. The importance of supplier management in business operations has been well documented, with many organizations reporting significant improvements as a result of their efforts to manage suppliers more effectively. However, identifying and understanding your suppliers, tracking and assessing their performance, making better decisions about which suppliers to work with based on the information provided by vendor relationship management systems ("VRMs"), reducing costs by managing effectively…these are all activities that can be made easier if you have access to digitized, complete data on all aspects of your supply chain.

The more data you have, the easier it is to manage your suppliers. This can be especially important if you are looking to reduce costs or increase efficiency in your supply chain. The second benefit of supplier data transparency is improved quality. In the same way that being able to see a supplier’s complete data profile can help you understand what products or services they offer, it can also help you make better decisions about which suppliers to work with that best fit your project needs. For example, if one company offers higher quality at a lower cost than another company, but both have similar profiles in terms of service levels and other metrics that are important to your business operations, then using their product would be preferable to using someone else’s.

2. Increased Productivity and Efficiency

Understandably, increased supplier data transparency can lead to better decision making about which suppliers to work with—saving immense time and money. The ability to determine whether or not an in-network supplier is on-track with project needs can save your company time and money by reducing onboarding time and cost spent onboarding and vetting new suppliers. Knowing exactly what products/services each in-network supplier offers will also allow you to optimize which sources you're working with at any given time—increasing productivity for the procurement process and throughout your entire supply chain. 

Additionally, increased supplier data transparency provides insight into the performance of individual suppliers and their capacity to meet your needs, as well as the ability to identify potential risks within the supply chain in advance. For example, if you see that one supplier consistently delivers faster than another for a particular product or service, then you may want to consider giving them more business opportunities. This can be especially helpful when it comes to managing risk. If you know exactly where each product/service is sourced from, then it's easier to ensure that your company isn't working with suppliers who are operating in risk-heavy zones. This will prevent future disruption to a project by utilizing trusted suppliers that are reliable to perform well, and proactively searching for new suppliers that do not present additional ESG risk.

3. Enhanced Compliance & Auditing

Compliance is important, and adhering to it isn't easy. The difficulty of adhering to compliance is largely due to non-digital, unorganized data surrounding operations and suppliers. When tracking vendor information, you’re often forced to deal with multiple spreadsheets that are not easily accessible or navigable. This makes it difficult for auditors or other individuals who need this information quickly for compliance purposes. Supplier data transparency improves supplier management and procurement processes by providing real-time visibility into supplier performance and risk ratings across the entire supply chain—this allows for ease with data access from internal and external sources when necessary to analyze and assess overall performance. 

Lack of supplier transparency can be costly for companies.

The costs of poor supplier management and transparency can be significant. Suppliers that don’t offer the right products or services for your business can create additional work for your team, especially if you need to onboard new vendors to meet needs in-network suppliers can fulfill. In addition, a lack of transparency can make it difficult to know whether your partners are committed to meeting their contractual obligations, which will negatively impact your bottom line and leave you vulnerable to financial risk.

To help companies navigate these challenges, Parq has developed technology solutions that help them manage their entire supply chain process end-to-end. Through its software platform, users have access to real-time supplier data visibility across all levels: tier 1, tier 2, and tier 3 suppliers, distributors and parent companies. By connecting each stage of the supply chain with one another seamlessly through a single log-in, procurement teams can collaborate with cross-business units to strategically facilitate the procurement process. Through this, procurement teams spend less time manually processing and monitoring data and more time making data-driven decisions that further company-wide supply chain goals.

With the expansive abilities to utilize data in supply chain management, it is important for companies to understand how investing in capable software is worthwhile, this can benefit them. By prioritizing supplier data transparency, companies will be able to improve their supply chain management and operations, increase productivity and efficiency as well as enhance compliance & auditing processes.

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