Supplier management is the process of managing the relationships and interactions with the suppliers who provide goods and services to your business. It involves activities such as selecting, evaluating, negotiating, contracting, monitoring, and collaborating with suppliers to ensure that they meet your business needs and expectations. 

Supplier management tools are software applications that help you automate and streamline these activities, saving you time and money in the process. In this blog post, we will explore how supplier management tools can benefit your business.

What is a Supplier Relationship Management Tool?

A Supplier Relationship Management (SRM) tool is a software solution that helps organizations manage their relationships with suppliers. It provides a centralized platform for sourcing and procurement teams to streamline their processes, collaborate with suppliers, and track supplier performance. SRM tools typically offer features such as supplier onboarding, contract management, supplier performance evaluation, and communication tools.

Benefits of SRM Tools

1. De-Risking: Supplier management tools mitigate supply chain risk by diversifying sources and reducing reliance on a single supplier or country. This shields against disruptions from geopolitics, trade conflicts, disasters, or unforeseen events. Amid China-US trade tensions, such tools identify alternative suppliers, compare prices, and quality, and enable better contracts. Avoiding overdependence ensures access to optimal products and services while minimizing costs and risks.
2. Improved Supplier Collaboration: SRM tools enable better communication and collaboration between buyers and suppliers. They provide a centralized platform for sharing information, negotiating contracts, and solving issues, leading to stronger relationships and improved supplier performance.
3. Enhanced Supplier Performance: With SRM tools, organizations can track and evaluate supplier performance based on predefined metrics. This allows them to identify underperforming suppliers, address issues promptly, and drive continuous improvement.
4. Risk Mitigation: SRM tools help organizations mitigate risks associated with their supply chain. They provide visibility into supplier performance, compliance, and financial stability, allowing organizations to identify and address potential risks proactively.

Benefits of Supplier/Buyer Marketplace

One of the features that some SRM tools offer is a supplier/buyer marketplace, in which businesses can discover, compare, and connect with potential suppliers from a large pool of verified vendors. This feature can help sourcing and procurement teams to:

• Access a wider range of suppliers with diverse offerings and capabilities, such as textiles, chemicals, metals, electronics, and more.
• Negotiate better terms and prices by creating competition among suppliers, using the request for quotation (RFQ) feature that allows buyers to post their requirements and receive multiple bids from suppliers.
• Increase efficiency and productivity by eliminating bottlenecks, delays, and errors, using the smart dashboard feature that enables buyers to manage their orders, payments, shipments, and feedback in one place.
• Ensure compliance and accountability by tracking and auditing every action and decision, using the trust score feature that evaluates suppliers based on their performance, quality, and reliability.

Growth of adoption of SaaS workflow management tools in India and the USA

Here is a summary of the statistics showing the growth of adoption of SaaS workflow management tools in India and the USA:

The Indian SaaS market is expected to grow at a compound annual growth rate (CAGR) of 30% over 2020–25 and double its share in the global market to 8%–9% by 2025. India has 13 SaaS unicorns as of 2022, making it the third largest SaaS ecosystem globally, after the United States and China.

The US SaaS marketplace is projected to reach $135.10 billion by 2023, growing at a CAGR of 5.49% from 2018 to 2023. The US accounts for more than half of the global SaaS market share, with the highest adoption rate across various industries.

The cloud workflow automation market, which includes SaaS workflow management tools, is expected to grow by 17.5% оver the period of 2021 to 2026. This growth is driven by the increased demand for streamlining and automating business processes among small and medium-sized enterprises.

Bottom Line

Supplier management tools are software applications that help businesses manage their relationships with suppliers, vendors, and contractors. They can help businesses save money and time by streamlining the procurement process, improving the quality of goods and services, reducing risks and errors, and enhancing collaboration and communication. 

By using supplier management tools, businesses can gain a competitive edge in the market, increase customer satisfaction, and achieve their strategic goals.

Therefore, supplier management tools are a valuable investment for any business that wants to optimize its supply chain and improve its performance.