Has your friend, or partner, ever looked at you and said, “Let’s go out to eat!”? (Side Note: we’re talking about pre- or post- COVID 19 of course)
There’s often not many seconds between the proposition of eating out, and a frantic barrage of mobile searches on various review sites, blog posts and news articles.
You may want to try a new restaurant, or want to weigh your options of restaurants you’ve previously been to dine. It’s exciting to eat out. But, you don’t want to eat at just any old restaurant. It’s a sure thing that you’re going to invest time and money in this experience, and you want to make sure it’s going to be worth it, no?
Going out to eat, in essence, starts with a mini ‘supplier’ evaluation; gathering information, processing information, evaluating your options, and making a (team) buying-decision based upon the data at hand (other diner’s opinions, reviewed performance, accolades, etc.) where you’d like to invest for that meal.
This is an odd stream of consciousness, yes, but I started pondering the likenesses and discourses between professional & private buying habits & processes.
Deciding to eat at Luigi’s Italian Market, and negotiating billion-dollar contracts aren’t really in the same league of purchasing decisions. The level of risk in these two investments are comparatively incomparable, but humor me here.
We make buying decisions and investments on a daily basis, in our private lives, based upon a plethora of information, insights & data sources. But, we rely on our ERP systems & spreadsheets to manage tactical and strategic buying decisions when we walk into the office.
Think I’m full of bologna?
Procurement Leaders’ research has shown that “for workflow assignment and supplier relationship management (SRM), more than 60% have no tools or rely primarily on improvised systems using Microsoft Office. For risk management, stakeholder management, category management, and information sharing, that figure rises to more than 70%” (Bain & Company 2018).
Utilizing improvised solutions is still the norm in many procurement organizations. Unfortunately, your homegrown solutions & spreadsheets aren’t doing you any favors; team input is siloed, data sources are stagnant and visibility is poor. Making ‘data-driven decisions’ into the predominant mode of operating is difficult when data visualization is low, data quality is iffy and input is partial.
Purchasing decisions require 360º insights, and if 360-degrees of business intelligence isn’t possible, at least 180º. To truly know what you’re buying, you need to know where that supplier is, who they are, how they’re adding value to your organization and why you’re buying from them.
When selecting a restaurant, you’re one Yelp search away from 360º insights.
What if your Suppliers had a Yelp profile?
A Yelp review page (for those who aren’t familiar w/ the app), consists of a 1–5 Star overall rating; visualized in a scorecard/profile, a bit of information surrounding the attributes of that business (location, type of company, contact details, hyperlinks to websites, photos, etc.), and input from other stakeholders. It’s a cockpit for understanding more about a business where one plans to potentially make a new investment, leave a review, or continue to support.
Yelp gives a user the ability to remain nimble, but also dig into deep analysis, in order to form a decision founded in insights, and then comment upon their own experience for those who will visit that business’ profile thereafter.
A Supplier Rating, Profile, or Scorecard should be a bit more robust than a 1–5 Star Likert scale, like a Yelp profile, shows about local businesses, bars & restaurants. But, at heart, the value added to the end-user is the same. Visualize a data point for analysis, based upon an aggregation of multiple variables, and allow that user to make their own decisions based upon the information at hand.
Why it’s important to rate suppliers
Do you really know where, and who it is you buy from?
Do you truly know why you buy from the suppliers you buy from?
These are some of the foundational questions we’re helping procurement teams to find answers to on a daily basis, at Kodiak Rating. Kodiak Rating is a Supplier Management solution built on a robust rating methodology, focused on giving customers and users deepened insights into their supplier base in the form of more advanced analytics and ratings so teams can have business intelligence at hand when needed for tactical & strategic procurement decisions.
By building supplier ratings, we help our customers quickly understand where there are risks and opportunities in their supply chain; where they should allocate spend, and who they want to cut out of the picture.
Our organization was founded in the same way many SaaS companies were founded; with a question and a hypothesis.
The Question: Why does a strategic manager (sourcing, procurement, supply chain) have better insights into how many steps they’ve taken on their morning run, then when they walk into the office to start a new sourcing project.
The Hypothesis: Make data-gathering simple, easy and fun giving procurement teams advanced ratings & analytics to rely on in order to truly know their supplier. By doing so, procurement teams will be able to turn their supplier insights into actionable results, driving organizational gains.
Our core mission and value as a company cuts directly to the heart of the question this article is focused on providing some answers to: why are personal buying applications more advanced than those utilized in professional buying?
How to build Robust Supplier Profiles: Risk, Resilience, Compliance, and Performance
Building robust supplier profiles and ratings requires one to gather as much aggregated data and objective evidence as possible in one place, visualized in a manner that is easy to grasp, and easily shared amongst the procurement team.
Displayed above is an example of a Supplier Rating Scorecard on the Kodiak Rating platform
In order to make sure that supplier insights and intelligence are relevant to your business, you will need to goal set. This is the beauty of building rating profiles of your suppliers. Rating requires you, and your team, to establish and define KPIs, expectations and acceptance criteria up front for what is excellent, good, satisfactory, and poor. Again, this may require a more detailed rating scheme than Yelp’s 1 to 5-star rating scale.
Taking the time to define the parameters for a supplier profile faces your procurement team with important questions such as what is an important behavior to us? What is our accepted code of conduct? What are good and bad supplier behaviors? And, what are our priorities? These kinds of exercises might entail challenges, but will help you to become more transparent, clear and probe you to communicate your expectations early on in the course of a supplier relationship. It also enables you to become concrete with internal KPIs, and in terms of the expectations you have for excellent behaviors versus unacceptable modes of operating.
At Kodiak Rating, we help our customers to build rating profiles for their suppliers tied to risk, resilience, compliance, and performance. Within each of these rating parameters, there are sub-parameters, and sub-parameters often have sub-parameters. Taking this approach to supplier rating and data gathering allows a supplier’s dating profile to be composed of a wide set of value criteria and allows the ability for both high-level insights, whilst also giving a user the ability to analyze a supplier’s profile or ratings with more granularity, down to the one specific data set.
In order to build a robust profile, the intelligence (ratings, information, documentation, etc.) visualized should be tied to your defined supplier KPIs, and be a balanced feed of data input from suppliers, input from stakeholders, input from 3rd party data sources, and input from empirical output data.
Not Reinventing the wheel, just making it spin faster
This is nothing novel, or new.
You’re likely evaluating your suppliers today in a variety of ways in order to best allocate spend, create cost savings, develop suppliers, engage in supplier-led innovation, manage supplier risks, and create opportunities for impact and improvement. You’re likely basing decisions upon spreadsheet data, stakeholder input, and building ‘profiles’, or maybe even ratings for your suppliers.
You’re on the right track.
But, this kind of mode of operating is likely analog, requires heavy manual work, and might be wasting your team’s time.
Wouldn’t it be nice if your supplier had a Yelp profile?