How to Create a Functional Supplier Diversity Program for your Business

A supplier diversity program is a means to ensure that the supply network a company uses takes into account the needs of marginalized and minority groups. This is important in ensuring that a company is a resource to the community within which it operates. The marginalized groups are women, youth, and special interest groups such as the disabled, and people who have been otherwise marginalized out of economic activity for one reason or another.
 

Why do you need a functional supplier diversity program for your business?
 

It has been recently discovered that marginalization of some parts of the population has caused a significant loss in economic growth and empowerment. This is because these groups lack the power to participate in economic activity under current conditions. As a result, these groups are a lost resource for the economic growth and development of a country. Supplier diversity is intended to ensure that these groups are integrated into gainful economic activity just as the rest of society. This not only creates economic empowerment and employment chances, but it also fosters a sense of community in society. Furthermore, supplier diversity empowers people to undertake gainful economic activity in a positive way and, therefore, reduced illegal and criminal activity.
 

How to integrate supplier diversity into your business
 

The first step involves taking stock of the entire business supply network, making a point of noting all the groups that are represented in the network. This will help the business to understand which segments of the community have been underutilized. The most effective way to do this is through the use of a data locator. This is a tool that is used to monitor the flow of data and locate data within a company. It can assist the company to track how supplies are sourced and what suppliers are used.
 

Once the data locator has finished the process of cataloguing a business’s entire supply network, the business can now embark on supplier diversification. In order to do this, they need to create a list of prequalified and vetted suppliers from underutilized population segments. They can use these groups to create a stable and reliable supply network that is able to meet all of their needs as a company. An added advantage to supplier diversification is that the business is able to reduce the risk that its supply network faces from external factors. This allows the business to perform effectively.

Read More

Effective Supplier Management System

Supplier management system is the process of defining the structure of relationships between supplier and consumers. It includes how this relationship will be maintained and developed. It involves setting up standards and making sure these standards are certainly met from time to time. These days, more and more sophisticated and easy-to-use tools for building, executing, expanding and automating supplier management system are available that enhance the entire business system. Supply management is generally regarded as a systematic business process that includes more functions than traditional selling, like managing inventory, coordinating the inbound material, and matching it to the internal production logistics. It is vital that these functions are monitored to ensure business remains in a good interest.

Supply management system primarily deals with the oversight of materials, services and inputs, management of suppliers who provide input in the form of goods and material in the market. Usually the performance of the supply management system is commonly measured in terms of the amount of money saved for the firm or company.

A new term that has come up due to increased globalization is the supply chain compliance. As the business grows, it needs to produce more, and in turn need more raw materials and indirect goods. This may mean increasing the number of suppliers that the business has. This increases the exposure of the business to a number of supplier related risks like material risk, quality risk, ethical risk, social risk etc. Failure of the supply chain means failure for business since it can lead to reputational damage, which no organization can withstand in this viral age. Hence, there arises a need for an effective compliance management software system to be put in place that will assess all the suppliers to your business on the safety parameters and secure the business.

Key benefits of a compliance tool for supplier management are:

• It protects the reputation and brand value of your business.
• Helps to identify loops in the supply chain management and minimize the damage they can cause.
• Monitors the activity of suppliers to ensure they adhere to the objectives set out by the compliance department.
• Ensure that risks are adequately handled and resolved in a cost effective manner.
• Improve the performance. Performance targets need to be based firmly and should trend upwards accordingly. If you have a proper supplier management system in place, the business is more likely to perform better.

Compliance risk management plays an important role in the smooth working of the supplier management system because it supports the confirmation of the rule, like specification policy, law or standard. Corporations work hard to ensure that their employees are aware of the relevant laws and regulations and make the effort to comply to them on a regular basis.

Read More

Important Aspects of a Supplier Diversity Program

Supplier diversity programs are solutions that encourage the use of suppliers from diverse backgrounds. The idea behind this business philosophy is to encourage the use of suppliers from marginalized backgrounds. The marginalization can be the result of ethnic, religious, gender, sexual orientation, age, or such other factors. This field of business intends to achieve two goals through the use of these programs. The first goal is to increase the inclusivity of the business environment on a national level. The second goal is to provide tools to empower those people economically that have been previously marginalized. There are certain salient aspects that must be covered in any program that is used to achieve diversity in supply networks. 

Use of a diversity database 

A diversity database is a database of suppliers who come from marginalized groups. These groups can be women, youth, or races that have been marginalized. The database acts as a centralized location of all of the information that pertains to particular sections of the supply network. The database needs to be quite comprehensive and must be kept updated. The information that is contained in this database is what companies will use to increase the diversity of their supply chains. 

Pre-qualification 

For a supplier diversity program to be efficient and successful at its intended use, it must have useful information on the suppliers contained. This means that the suppliers need to be prequalified. Pre-qualification means that these suppliers have been vetted on their ability to meet the needs of their clients. If the suppliers are not vetted, there is the possibility of poor suppliers getting into the information matrix. This will reduce the effectiveness of the supply chain and will reduce the trust that companies using the database place in it. Pre-qualification builds faith and trust in the database and will, therefore, increase the usage of the database. 

Geo-location based information 

An effective supplier diversity program is one that is region based. This is because the location of the supplier is an important factor that every business will take into account. This means that when cataloguing suppliers from marginalized groups the information must be sorted into regions. This way the companies using the database are able to determine the effectiveness of the suppliers that they choose to work with. Diversity in supply chains is not just about community social responsibility through affirmative action. It is a tool that enables a company to increase their positive impact on economic empowerment.

Read More

Why Supplier Diversity is Enhanced by the Use of Data Enrichment Tools

Supplier diversity program is a tool that businesses use to ensure that they have a strong and functional supplier network. They are also able to ensure that the supplier chains that make their supply network are as strong as they possibly can be. This makes the business secured in terms of the ability of its supplier to meet its needs at any point in their operations. That these programs can be bettered is without a question. One of the least appreciated tools that can make a real difference is the use of data enrichment tools in the process.
 

What are data enrichment tools?
 

These are tools that are used to analyze the data that a company produces and derive any actionable intelligence from the same. They enable the company to take raw data derived from its operations and turn it into a useful asset for the company. The first task that these tools perform is cleaning up the data that the company has accumulated. This means that any duplicate entries are deleted, extra information is added if it available, and damaged data is removed or restored if that is possible. The data, once it has been cleaned, is run through a number of processes that seek to identify trends and patterns that can be usefully interpreted to provide value to the company.
 

The process is at the core of business analytics, but it is only recently that businesses have discerned that they could use it for supplier programs. This allows them to identify any weaknesses and inefficiencies in the way that they source supplies and suppliers. They are, therefore, able to take any necessary corrective action to rectify the situation before it becomes a problem to their operations.
 

How does this impact supplier diversity programs?
 

First, it boosts the knowledge base that is used to undertake the process of supplier diversification. The processing of data allows the company to identify trends and patterns that may be too subtle for normal manual methods. Second, it enables the company to identify suppliers who are within its supply network that are not meeting their expectations or those that can bear greater responsibility. This enables the business to optimize the performance of its supply networks. Lastly, it enables the business to automate the process of supplier diversification. This results in time saving and cost saving that improves the supplier diversity performance of the business as a whole.

Read More

How to Create a Supplier Performance Management Strategy for your Business

The ability of any business to perform its operations in a smooth manner is directly tied to the reliability of the performance of their suppliers. This means that every business that intends to be able to undertake its internal processes without fail or hindrance would do well to invest in supplier performance management. What this does is to help the business to establish an acceptable and expected level of performance from its suppliers. This is what makes the business confident in its ability to perform under any and all circumstances.

Currently, there are industry standards that have been established in this area of compliance risk management. However, the methods of enforcing these standards have not been standardized across all business segments. It implies that, in most cases, the business will have to develop its own strategy. The only way a business succeeds at this is by creating a framework based on its intended targets. The business can then implement the framework and adjust it as it sees results. The framework must be built on several underlying objectives.

The first objective is that the business needs to have access to a wide range of suppliers. This is achieved through the creation of a supplier database. The business needs to get the contacts of all the suppliers that offer products or services that it needs within their area of operation. Businesses that operate nationally and locally are the best choice. This is because localization means that they operate in the same business environment economically and will, therefore, price their service accordingly. Nationally enables them to have a wide supply network of their own. This means that all needs of the company will be met.

The business can now move on to compliance risk management stage one. Here, the business will prequalify all of the suppliers that it has shortlisted in order to get a shortlist of the few selected ones that it is likely to use in its operations. The process of pre qualification is particularly valuable as it determines the strength of the supply network created. It needs to check the level of service that the supplier claims to be able to provide. This is useful in establishing what the supplier is actually capable of doing. It is useful to assume that the level of actual performance will be lower. They can then create a list of suppliers who meet their compliance risk management standards and ensure that their supply contracts reflect this, thus ensuring a reliable supplier source for themselves.

Read More

How to Design a Functional Supply Network

Any company, irrespective of the industry in which they operate, is forced to rely on other companies in order to achieve its objectives. Some of these companies supply them with certain products or services which enable them to create their own products or services. The supply network of a company is, therefore, one of the most prominent aspects of its design. The company must find ways of designing their supply network in an optimized manner that meets several key principles. The supply chain must be reliable and stable. A company can be halted by a break anywhere in the supply chain. This will cost it large amounts of money if allowed to occur. Second, the supply chain must be cost effective. This calls for the supply chain to be as short as possible in order to reduce the margins added on to the cost. Thirdly, the supply chain must have redundancies. This ensures that even where the breakdowns occur, the company is still able to function adequately. All of this is why a business must invest time and energy into the creation of a proper supplier performance management strategy.

In order for the company to ensure that they get the best value for their money, they must shorten the supply chain. The best way to do this is to use a data locator to determine the length of their current supply chain. The intention of using data locators is to visualize how orders are met. This enables them to map out their supply network’s true extent. By creating a supply chain map, they can easily determine areas where there is the possibility of optimization being performed. For example, where their supplier is at a tertiary or secondary level, they can seek the services of a primary supplier. This allows them to ease the costs that are incurred due to the addition of intermediaries between themselves and the main source.

When undertaking supplier performance management, the company must understand that this is a continuous process. It should be measured on a rolling basis; the company can determine the length of the time intervals between the performance reviews of their current suppliers. These should ideally be performed in segments to prevent the entire network from being disabled at the same time. A good interval is based on the structure of the supplier contract. The time between intervals should ideally be the time slotted for the expiry of the contract.

Read More

How Businesses are Ensuring that their Supply Chains Function Optimally

A supply chain, while being an essential aspect of the functioning of the business, can be quite tricky to manage. This is because it is an external factor, and the business does not have full control over all its aspects. The detriment an inefficient or broken supply chain poses to a company is too debilitating for the company to risk. The best strategy is for the business to develop a supplier performance management strategy. This eases the performance of supply duties and ensures that the business performs its functions without delay or stoppage.

The process of managing the performance of suppliers is not relegated to once the relationship is already established. For best results to be achieved in managing the supplier’s performance, the process must be undertaken from the initial stages of the vendor sourcing process. This means the company must undertake a comprehensive vendor screening process. They must vet the vendors on their ability to meet the desired service delivery levels.

The company starts the vending process by seeking submission of proposals and service level agreements. This provides them with a theoretical understanding of what to expect from the suppliers if they should contract them. They can then eliminate the ones who don’t measure up to their desired standards. However, when they are doing the elimination, they should still keep the contacts and other relevant information on file. This information can later be handy and useful. They can then call in the vendors for an interview; this should be accompanied by a visit to their facilities. This is important if the business is to establish what information contained in the briefs submitted was fact and what was advertising puffery. They can then give the business that they found best qualified a trial run. The best way of doing this is by giving them actual orders. Telling them it is a test leads to skewed results as they will make an effort to impress.

The information derived from the trial run can be used to create a core group of suppliers who can be readily relied upon. These will form the backbone of the supply chain. This enables the business to create a supply network that is resilient, which enables it to function without interruption or delay. Businesses must make a point of investing in supplier performance management if they are to gain any useful control over external factors of performance, thus enabling the business to function optimally at all times.

Read More

Focus on managing supplier risk for effective performance

Businesses are increasingly focusing on their core business activities. This is because globalization and increased business innovation have allowed the business to outsource all other aspects of its performance. The most notable aspect of outsourced performance is arguably the suppliers. This is because, for any business, especially those in the manufacturing industry, maintaining supply is critical to service and product delivery. It is for this reason that those involved in the administration of company supply are being forced to develop their own mechanisms for supplier risk management. These are incorporated into the already existing supplier management systems used to regulate supply. 

So what risks do suppliers face that the business should take an interest in? First, we have financial liquidity of the supplier. This is a traditional concern that has always existed. Companies have to take an interest in how well the companies that they source products from have managed their liquidity. This prevents supply from being interrupted because of financial problems.

Second, increasing insecurity and instability has become a factor for consideration. Companies now outsource their raw materials globally; if the raw material is sourced from a country that has shown signs of instability it could destabilize all of their production capacities. Furthermore, the increase in terrorism now means that businesses must also consider whether their suppliers are a supply threat or are secretly funding terrorist elements and activity.

The supply manager must incorporate the above mentioned risks when formulating a supplier risk management strategy. The supplier management system must therefore have the following structure. First, it must provide information on all the available suppliers a business can contract. These should then be pre-qualified which means that their financial stability is vetted. They must also be checked for their ability to perform. The method of determining ability to perform varies from company to company. Some companies make small orders test it, and other just check the mechanisms for delivery. This results in establishing a reliable supplier management system that the company employs. It enables the company to create a proper supply network that is resilient to change while being adaptable. At the basic level are the suppliers the company relies on a daily basis and on a higher level are the contingency suppliers. The company can use this information to develop strategic partnerships between it and suppliers that ensure that the business will be able to grow. This is necessary for long term sustenance and growth of any business.

Read More

Compliance Risk Management in Accounting Firms

At the most basic level, risk is defined as the probability of attaining or reaching certain kinds of goals and the risk is measured in numerous terms of the effect that any event will definitely have on the complete degree of uncertainty of reaching numerous stated objectives. Risk is usually known in this particular context as a negative connotation and the risk of an adverse event occurring. This article will help you figure out about the overview of the new risk management standard that is issued by the professional standards board.

What is the risk involved in accounting firms?

In any context of the professional accounting firm, the overall risk is not considered as a new concept for various practitioners and it has been attached to the profession for as long as all the accountants have offered different services in any commercial settings. However, as the number of size of different legal claims against all the public accountants has increased over past few years, so too has the issue of risk and complete risk management.

Compliance risk management is a system through which different firms seek to easily and effectively manage its over-arching public interest obligations that are combined with managing its business objectives. Apart from that, an effective risk management system will easily facilitate complete continuity of the business, enabling complete quality and different types of ethical services to be easily supplied and delivered to different clients and making sure that the reputation and complete credibility of the firm is properly protected. 

The New Requirements

The complete process of overall risk management in any professional accounting firm requires a correct consideration of all the risks around business continuity, governance, human resources, business, technology, different types of regulatory and financial environments. While it is considered to be extremely relevant to numerous operations of the practice that must definitely be given proper attention.

If you feel that compliance risk management can help you manage your business well and your enterprise requires it, look for numerous reputed providers present online. Apart from that, you can also look for solution providers that provide effective and ultimate solutions for vendor screening and more. Although, needs of every enterprise is different, which means it is extremely important for you to figure out what your requirements are and then select a quality provider as per your needs and requirements. It is also important for you to check the credibility of the provider and ensure that you are dealing with the best.

Read More

Highlight Features of Supplier Risk Management Program

It is a universal truth that you need to put hundreds of good deeds for building good reputation, but only one bad thing could force you to lose everything. This is the reason why supplier risk management program is implemented in business organizations. This specialized program addresses supplier management requirements pertaining to management of corporate governance, compliance, risk and performance programs. These effective and comprehensive solutions empower business firms to consolidate supplier GRC information in the organization, reduce down costs and alleviate risks found in supplier base.

Undoubtedly, today most of the business organizations are adopting supplier risk management programs for boosting business performance. In fact, it behaves as a catalyst for gaining improved vendor performance by finding out all possible risks and eliminating them by implementing effective process improvements. Some of the highlighted features of these services are mentioned below. Go through them to develop deep understanding towards them.

• Efforts are made to adopt unified approach for managing risk, governance, performance and compliance risk management programs on supplier base. 
• The risk, compliance and performance programs are automated in order to ensure that the defined standards are followed consistently and effectively.
• Reducing supplier risks through automated and proactive monitoring of supplier information.
• It facilitates you to perform business activities through customer driven scoring model.
• Apparently, automated expiration notices and reminders are used for improving accuracy and compliance.
• You will be able to make benefits from automated assessments of supplier and internal personnel.
• KPIs and libraries of the standardized assessments are proposed by these services.
• All the essential information related to scoring, supplier reporting and dashboard capabilities are captured.
• In case, if the organization identifies any risks involved, then efforts are made to apply predetermined correction action plans including deadlines and ownership that is easily monitored and tracked. This ensures supplier performance.   

The efficient supplier management needs you to make use of centralized and integrated technology platform for puling data storage resources containing supplier data. Most of the companies invest a lot in hiring effective technologies that can help them for coming out of the difficult situations.

The centralized supplier risk management programs help in mitigating supplier risks, supplier compliance and boosting overall supplier performance. Not only this, these specialized program also support in building good reputation in the marketplace. What else one should look for after getting well-organized and managed supplier performance program! Invest in the best available supplier management services.

Read More

Why Modern Businesses Need Supplier Management System

Supply management has become an extremely significant factor for enterprises to compete effectively at both global and local scale. A management software in such situations has become essential for manufacturing industry whenever we talk about delivering the products at a highly competitive rates and at a much higher quality as compared to their competitors. Here are some significant reasons why supplier management has become an imperative part of today’s manufacturing industry.

Competitive Edge over Core Competencies

Numerous businesses today have changed rapidly and have also become much more competitive in nature. Businesses today not just require to operate at a very low cost to actually compete and it must also develop its own core competencies to effectively and easily distinguish  itself from numerous competitors and stand out in the market. While creating competitive edge, enterprises require to divert its various resources to actually focus on exactly what they do best and also outsource the process and the overall task that does not have much of an importance to the overall objective of an enterprise.

The supplier management system also allows various companies to re-think their complete operation and also restructure it properly so that they can easily focus on its core competencies and also outsource various processes that are not allowed within the core competencies of the company. Due to the current competitive market, it is extremely important that a company should indulge in supplier management to survive properly. The strategy here is to apply supplier management so that it does not impact their correct marketing and positioning but also strategic decision on selecting correct partners, manpower and various resources.

By properly focusing on numerous core competencies and correct data enrichment the company will also permit to create niches and significant specialization of core areas. In order to create a proper niche for competitive advantage, various enterprises must look at the bigger and better picture of the complete process and figuring out exactly which process can be reduced, raised and created in order to increase overall revenue of a company.

A good quality supplier management system helps in managing the correct data and overall security of any business. It is also a great way to get most out of your system and also increase the overall productivity of any enterprise. Find out more about this software system online and also make the most of supply chain in order to increase company revenue.

Read More