How Can Technology Improve the Relationship Between Vendor and Manufacturer?

The relationship between manufacturers and vendors is what we call the supply chain process. Here technology makes a significant impact and can do more if organizations embrace technology in more ways. In most cases, organizations holding onto old processes and systems have inefficiencies in their systems. It is also because of their failure to utilize the technology available for internal and external processes in an optimal manner.

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Technology in Supply Chain

Systems and processes that are part of the supply chain benefit from technology in many ways:

  •       It helps reduce cost
  •       Improves efficiency

However, in reality, it is under-utilized in most organizations, whether it is internal or external processes. When it comes to internal operations, automated systems can speed up things. Externally it can also help strengthen the buyer-supplier relationships.

Supplier Relations

This aspect is often undervalued when buy-side companies do not realize the importance of a balanced relationship. When they give due importance to suppliers, it can benefit buying companies in different ways. It is an alliance of giving and takes. Leaders in procurement need to have favourable relationships with suppliers. This ensures that they receive quality services and through efficient processes. Suppliers, on the other hand, need to respect and trust the buyers. In this way, they make buyers a priority.

For a company, the first step in a procurement process is to set up a system that will identify the right suppliers. It is the first step to establishing a partnership that, without the aid of technology, can take a long time to establish. When one is searching for vendors manually, it is a time-consuming process. Also, chances of overlooking certain details are more in this aspect. On the other hand, an online vendor evaluation system in place helps to simplify the steps. You can quickly identify which vendor is the right one for your business within a few clicks. Once the right vendors are identified, the remaining processes include payment and communication channels. Today there are robust e-procurement systems that can handle all such processes and more.

Benefits of eSourcing

Manual search for the right suppliers is a gruelling process, and today it is outdated, thanks to different eProcurement systems that are in place. E-sourcing tools help companies compare different suppliers with set parameters or standards. It also makes the selection process effective and efficient. Buyers need not worry about documents of contracts when such electronic systems are in place. With e-sourcing, it is possible to choose the right suppliers easily. Once relations are established, all necessary information remains secure in servers and in systems of the buyer organization. Procurement leaders can easily compare different aspects of supplier organizations and then decide which the right fit is.

  • Smooth Communication. Once suppliers are in place, the right communications are vital to maintaining good business relations. Often eSourcing systems come with an established communication setup. This allows vendor confirmation to go through once tenders are accepted and finalized. Also, contracts signed, and rates agreed are part of such automated processes. Timelines for supplies and release of payment can be scheduled through such systems in a seamless manner. Hence, all necessary communication gets streamlined when procurement is done through an automated system.
  • Payment Processing. Besides communication and exchange of important documents such as contracts, bids and tenders, payment processing, receipt of the same need to be documented and conducted in a secure manner. Modern procurement systems have payment technologies that allow companies to compare prices and charges of different suppliers. Also, they allow invoices to be raised as per automated schedules and timelines. In such ways, automated systems prevent unnecessary delays and gaps in payments in buyer and supplier relationships.
  • Operation Transparencies. This is another benefit of automating buy-sell transactions and setup. Operational transparencies help alleviate the need to make requests and provide real-time information. It helps simplify routine tasks and takes the pressure off the buyers and sellers. It opens up a window like a channel for both parties. Whether a transaction has been completed or payment processed, all such information is available to both parties through their respective windows on an integrated portal.


Automated systems and processes have come a long way to smoothen relationships between vendors and manufacturers. Companies can swiftly maintain contracts and details of several suppliers in one system. They can also ensure that order transactions, payments are made on time or as per contract agreements.

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