“Competition today is not between companies, but between supply chains,” famously observed Martin Christopher, emeritus professor of marketing and logistics at Cranfield University’s Cranfield School of Management. And increasingly, effective supplier analysis is the key to effective supply chain competition.
Because with supplier analysis, companies can monitor and measure not only the performance of their suppliers, but also carry out sourcing analysis and strategic sourcing exercises—both of which are vital tools for unlocking supply chain gains through cost improvement and supplier consolidation initiatives.
But how best to carry out supplier analysis? Periodic audits and analyses, frequently used a few years back, fail to capture the full detail of a company’s day-to-day transactions with their suppliers. Increasingly, businesses are turning to the rich seam of data contained in their enterprise systems, which record every aspect of those transactions.
Supplier analysis: Supplier Relationship Management or Business Intelligence?
But one thing’s for sure. While enterprise ERP systems contain rich seams of supplier-related data—the core raw material for supplier analysis—enterprise systems aren’t the best means of extracting and analysing that data.
That’s because the vast majority of enterprise ERP systems are largely transactionally-focused, containing only rudimentary reporting tools for supplier analysis.
In short, they hold the raw data—the supplier records, open and closed purchase orders, goods inwards receipt data, and invoicing and payment details—but don’t provide much by way of supplier analysis.
Hence the growing use of so-called Supplier Relationship Management (SRM) systems, modelled on Customer Relationship Management systems. Interfaced to the transaction detail contained in enterprise ERP systems, these aim to plug the gap, and provide the missing supplier analysis tools.
But while SRM systems might be appropriate for Fortune Global 500 companies, they’re not necessarily the best way for ordinary mid-sized businesses to carry out supplier analysis. Instead, many of these businesses prefer to use Business Intelligence systems for supplier analysis.
Supplier analysis: why use Business Intelligence?
It’s not difficult to see why. While SRM systems provide minute detail on every aspect of the supplier interface, ordinary mid-sized businesses don’t need that amount of detail.
They want more a detailed supplier analysis than that provided by their enterprise ERP systems, to be sure, but they don’t want to make the fairly hefty investment called for in order to get at the level of detail that a specialist SRM system will provide. An investment that will only complicate what can already be, in many businesses, a fairly complex IT architecture.
Instead, it makes sense for them to leverage their existing investment in a Business Intelligence system for supplier analysis—a system already interfaced to their enterprise ERP system, and which is already bought and paid for.
Especially when, as is often the case, many Business Intelligence systems come with specialist supplier analysis modules.
Supplier analysis: Business Intelligence or Cloud Business Intelligence?
Here at Matillion, we’re naturally predisposed towards Cloud Business Intelligence. It’s what we do, and it’s what our customers come to us for.
With Cloud BI, they don’t have to worry about server capacity, data warehouses, obtaining the in-house SQL skills to write reports, or any other the other headaches associated with traditional on-premise Business Intelligence.
For a single monthly subscription, they get on-demand Cloud BI, together with self-serve reporting—and get it, moreover, much sooner than is possible with a traditional on-premise Business Intelligence project, and with typical implementation times of two to three months.
And what we’ve noticed is that a growing number of our customers have implemented our sales analysis and financial analysis modules, and then come back to us for our inventory and supply chain module.
Why? Often, the impetus is supplier analysis.
Supplier analysis: facts at your fingertips.
Because here’s the sort of supplier analysis those customers are wanting to be able to use Matillion Cloud BI to deliver:
- Powerful, drill down analysis of purchasing by supplier, manager, region/country and company/division/site.
- Analysis of supplier delivery and ‘On Time In Full’ order completeness performance.
- Identification of rationalisation opportunities across supplier and product types or specific SKUs e.g. is the same product being purchased from different suppliers, or the same supplier being used by different parts of the organisation?
- Automatic, scheduled reporting to suppliers of stock positions, goods receipts, and delivery performance.
So if that’s the sort of supplier analysis that your business is wanting to perform, then get in touch.
To find out how you can leverage Cloud BI to improve supplier analysis in your business, download our free guide below