Building your own guided buying engine (supplier data base)

A supplier database is a collection of information about the vendors or suppliers that a company uses to procure goods or services. It can include data such as the supplier's name, contact information, products or services offered, pricing, delivery times, and any other relevant details.

Maintaining a comprehensive and up-to-date supplier database can help companies streamline their procurement processes, ensure consistency in the quality of goods or services received, negotiate better pricing and terms, and reduce the risk of supply chain disruptions.

In addition, a supplier database can also serve as a valuable tool for tracking supplier performance, identifying areas for improvement, and fostering better communication and collaboration between the company and its suppliers.

Spending too much with one supplier is risky. If that supplier has trouble in fulfilling their obligations or raise their prices significantly, the company depending on them may have to delay the delivery of products to their customers or increase their prices as well, which would affect their business. So, ensuring the security of supply by expanding the supplier base is a key objective for procurement function.

Low knowledge of markets and suppliers create roadblocks that impact the business and opportunities for savings are missed and trends are not identified and leveraged. Continuous trainings to enhance competencies help to bring up the procurement community to stay up to the market talent standard.

Worldwide effort on standardization, continuous organization headway, repeated acquirements, innovation at every level, new economic investments plans, strong push from the countries on knowledge transfer and indigenization demands and moreover development on optimized logistics flows permit a plenty of options for buyers to source whatever and where ever they want.

Except monopolies and highly influencing buyer companies, we can find dozens of sellers and service providers in the field. Prequalify and shortlisting the best out of dozens should be the continuous effort of buyers.

“Recognize your product and service provider in-depth in advance and engage them for any single-dollar contract.

It’s buyer’s interest to protect his company and his customers with the right choice of products and service provider.”

Considerate in detail this topic

Spend analysis helps to categorize both recurrent and nonrecurrent spends in a buyer company, which also helps to build your supplier data base (SDB). In general, SDB consists of supplier’s annual spend, contacts, spend category, other challengers, monopoly alert, past performance, business review details, potential risks, ongoing actions etc... Moreover, long-term procurement actions can be achieved once we know our supplier base.

Most of the mid-sized and large-sized companies understood the importance and long-term benefits of addressing SDB topic. Since many years, companies have started building their own or central supplier data base that is also called approved vendor list (AVL) to serve their purpose.

An Approved Vendor List (AVL) is a list of suppliers or vendors that a company has evaluated and approved for use in their procurement processes. The AVL is typically developed by the company's procurement or supply chain department, and is used to ensure that only qualified and reliable vendors are used for the purchase of goods and services.

To be included on an AVL, a vendor must typically undergo a rigorous evaluation process that includes factors such as quality, delivery time, pricing, and compliance with industry standards and regulations. Once a vendor has been approved, they are added to the AVL and can be used for procurement purposes.

Maintaining an AVL can help companies ensure consistent quality of goods and services, reduce the risk of supply chain disruptions, and negotiate better pricing and terms with their approved vendors. However, it is important to periodically review and update the AVL to ensure that it remains relevant and effective in meeting the company's procurement needs.

Supplier data base undergoes systematic yearly or by-yearly revision to give chances to newcomers and develop challengers.

Following are the benefits:

• consolidated supplier data base as a quick reference document,

• one-stop place for relevant supplier documents and information,

• elimination of time-consuming procurement actions,

• business continuity with prequalified supplier retains supplier relationship,

• no need to go market to source every time while in need and

• critical spend management within prequalified suppliers.