It is undoubtedly a key objective for buyers to improve their supply chain data, and to have a clear supplier prequalification process in place. But the benefit of those things isn’t all on the buyer’s side. For suppliers, achieving prequalification status reduces the administrative burden and provides the foundation to create new and lucrative relationships.
By making it easy for both buyers and suppliers to access accurate and up-to-date supply chain data, supplier prequalification programmes add value to suppliers at every step of the process, including winning bids, dealing with RFIs (Requests for Information) and keeping up with compliance.
But why is it so important that you improve your supply chain data and achieve supplier prequalification status?
There are lots of opportunities out there
From oil and gas companies in Norway raising their investment forecasts in 2019 to the UK’s infrastructure projects, there are a lot of big projects for suppliers to get involved in. And in Latin America, the gross domestic product (GDP) is growing faster than in the major developed economies, making it an appealing market for companies that can overcome the region’s supply chain complexities.
The UK government’s National Infrastructure and Construction Pipeline listed over £400 billion of planned investment in 2018, of which £190 billion will conclude by 2020/21. For the period 2018 – 21, £51 billion will be invested in energy infrastructure and £35 billion will be put towards utilities projects.
By going through a recognised supplier prequalification programme, suppliers can eliminate a lot of the time and resource-consuming work that goes into building relationships with buyers and going through the RFI process.
By bringing buyers and suppliers together in focused communities, we help foster the kind of innovations that make supply chains work better for everyone. A recent example of this is when the UK Oil & Gas Authority (OGA) and Oil & Gas industry buyers engaged with our Achilles FPAL community to communicate new business opportunities to the supply chain. This was done via PILOT Forward Work Plans which are updated regularly on the Achilles FPAL community page.
An easy way to maintain credibility
Maintaining supplier prequalification status for your customers is a mark of credibility, it gives buyers the assurance that the information they have to hand is accurate and current. Once you’ve achieved prequalification status, your focus should be on ensuring you keep your supply chain data up to date. This can be as straightforward as regularly checking on documentation such as internal policies and insurances, and making sure your customers know that you have these in place and that they’re valid. Accurate and up-to-date supply chain data provides buyers with an ongoing view of your capabilities, experience and evolution.
This is especially important for businesses that subcontract most of their work, as what their clients see each day is their supply chain. In this scenario, having a process that makes it easy for suppliers and buyers to create and maintain transparent supply chain data is incredibly valuable.
Keep up-to-date with industry standards
Achieving supplier prequalification status tells buyers that you provide a reliable service and you are a trusted supplier that complies with industry standards. In addition, if you have gone through an external supplier prequalification and audit by a trusted organisation means that buyers don’t need to go through lengthy due diligence to know you are competent.
This means that when you connect, you can get straight down to business. High quality supply chain data can help actively minimise the amount of administrative legwork you need to do. For example, our TransQ community helps to ensure that the companies that make up transport supply chains are all audited and validated using common industry standards. Similarly, our BuildingConfidence community provides the construction industry with an independent third-party accreditation process, giving an extra level of due diligence in aligning with the latest industry regulations and directives.
Regulatory compliance is just one side of the equation though. Many buyers are determined to always work to the highest environmental and health and safety standards and need assurance that the companies they work with are capable of working to them too. Supplier prequalification is the simplest and most efficient way of indicating to buyers that you understand and are capable of working to these standards.
And, if buyers require a deeper evaluation of a supplier to the one provided by the pre-qualification process, audits provide an expert and objective view of your capabilities, working practices and management systems.
By being a member in our communities, you are not only gaining access to opportunities but you can also play a significant role in the buyer’s supply chain risk management processes. Effective supply chains are not just about buyers dictating what they want from suppliers, it is a two-way process built on communication and transparency. This is exactly what our communities were set up to facilitate.