Supply Excellence — Supplier Information Management in Action

Supplier Information Management in Action

July 23rd, 2007 · by Tim Minahan · No Comments · Top 5 Supply Strategies, best practices, supplier management, supply management, supply risk

Sparked by risk-management leader Hewlett-Packard’s comment that “the greatest supply risks are the day-to-day operational risks that can detract from shareholder value and performance,” Supply Excellence has been taking a deeper look at how best to gather, manage, and track key supplier profile, capabilities, and performance information.

Today, we begin showcasing companies putting Supplier Information Management principles in action.

Consider Constellation Brands. The world’s largest producer of wine and a leading importer of liquor and spirits needed a quick way to gather profile, capability, and risk information across thousands of globally dispersed suppliers, used by seven independent operating companies running on three continents.

Constellation made Supplier Information Management a foundational element of its global supply chain management overhaul. As part of a broader supplier management system (and approach), Constellation adopted a commercially available, Web-based supplier portal capability that empowered suppliers to register and manage their own profile and capabilities information via a self-service portal. Suppliers are guided through a structured registration commodity-specific survey defined by Constellation’s supply chain team. The survey addresses some common global measures in the areas of cost, innovation, quality, and service. The supply chain group works with the businesses to add measures that support unique attributes of specific spend categories or regional jurisdictions.

Suppliers are prompted to upload critical documentation — such as certifications or proof of insurance. The system automatically “scores” supplier responses, enabling Constellation’s commodity managers to quickly segment and prioritize suppliers for further review, corrective action, or rationalization.

“Instead of our buyers running around trying to gather accurate [supplier] data every time we conduct a sourcing project or supply chain audit, the system provides that information to the commodity manager’s desktop,” said Chris Herbst, Supply Chain Program Manager at Constellation Brands.

The system also automatically tracks key milestones — such as insurance termination — alerting suppliers in advance when information or documentation requires updating. If suppliers are unresponsive, the system will escalate the issue to the appropriate commodity manager for further action. Says Herbst: “This makes us more efficient and provides an early warning system for supply chain risks.”

The common supplier information repository also gives Constellation’s distributed team a common view into supplier capabilities and risks by commodity, business, and region. In addition to the above benefits, this enhanced supply chain visibility has helped Constellation identify opportunities to increase spend leverage and cull supplier rolls across divisions.

Constellation has wisely connected these Supplier Information Management capabilities with supplier scorecarding and performance management, and corrective action and improvement plan management.
Herbst gives a complete overview of Constellation’s supplier management approach and experience in a recent Top 5 Supply Strategies Webinar. Listen to this supplier management approach here.

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