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Supplier network: definition & important aspects for buyers
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Supplier network in a nutshell:
A supplier network is the strategic networking and systematic organization of all of a company's active and potential suppliers. For purchasing, it enables optimum security of supply, risk minimization and efficient use of synergies through coordinated cooperation with various suppliers.
Example: A car manufacturer maintains a global supplier network with 2,500 active suppliers from 45 countries, whereby 150 strategic core suppliers cover 80% of the purchasing volume of 12 billion euros and are networked via a digital supplier portal.
Contents
What is a supplier network?
A supplier network is an association of suppliers who work closely with a company to ensure an efficient and reliable supply of goods, materials or services. By forming a network, companies can build and maintain relationships with multiple suppliers, resulting in improved coordination, communication and collaboration along the supply chain.
Core elements of a supplier network
Significance for purchasing
An effective supplier network is crucial for purchasing, as it forms the basis for stable and flexible procurement. A strong network makes it possible to avoid gaps in supply, reduce costs and increase the quality of the goods and services purchased. It also promotes innovation by facilitating access to new technologies and products through close cooperation with suppliers.
Supplier network: From isolated supplier relationships to integrated networks
In the modern business world, the supplier network is a decisive success factor. Building on the theoretical foundation, it enables strategic cooperation between companies and their suppliers. The practical significance lies in increased efficiency, risk management and greater flexibility along the supply chain. In order to meet the growing market requirements, a change from traditional individual relationships to integrated networks is essential.
Old: Traditional supplier management
Traditional approach: Traditional supplier management focuses on isolated and transactional relationships. Companies usually only interact with suppliers when necessary and focus on price negotiations and contract conclusions. Communication takes place via telephone, fax or e-mail, without deep integration of the systems. Tools such as simple ordering processes and manual data entry characterize everyday life. This approach leads to limited transparency, longer delivery times and reduced adaptability to market changes. In addition, synergy effects and innovation potential remain untapped as collaboration is limited to the bare essentials.
New: Collaborative supplier network
Supplier Network Collaboration: The modern approach promotes a collaborative supplier network in which all partners are closely networked. Digital platforms and technologies such as EDI (Electronic Data Interchange), SCM (Supply Chain Management) systems and cloud solutions enable information to be exchanged in real time. Leaps in innovation such as big data analytics and artificial intelligence enable proactive control of the supply chain. Companies and suppliers work together on forecasts, inventory management and development projects. Practical benefits include shorter delivery times of up to 30%, reduced stock levels thanks to just-in-time deliveries and increased responsiveness to market changes. The close cooperation also promotes innovation and improves the competitiveness of all parties involved.
Practical example: Automotive industry
A leading automotive manufacturer successfully deployed a collaborative supplier network that closely connects its global suppliers. By integrating EDI and common SCM platforms, production schedules and inventories could be shared in real time. This led to a 20% reduction in delivery times and a 15% reduction in stock levels. In addition, the closer cooperation enabled the development of a new electric drive, which led to a 10% increase in market share and strengthened the company's position as an innovator.
Conclusion on supplier evaluation
Supplier networks are indispensable strategic instruments for successful and sustainable procurement. They not only enable better risk diversification and cost savings, but also promote innovation and quality assurance through close partnerships. Success is based on a balanced mix of strategic relationship management, digital integration and effective risk management. Looking to future developments, intelligent networking through new technologies such as AI and blockchain will further increase efficiency and transparency.
