The advent of digital in the commercial part of a company should not make us forget the importance of exploiting information and communication technologies to better structure relationships with its network of suppliers, and therefore better manage its company's supply chain.

Let's see together here why and how it is extremely important to start digitizing your supplier relationships, which is one of the parts that has perhaps been the least prioritized until now in organizations, and particularly in B2C type companies. , very focused on their customer relations.

Note: this article was originally written and published in 2011. It was republished in 2023, being still relevant in the field of supplier relations.

Why this rise in digital power in the field of supply logistics?

Globalization, outsourcing and geographic distance

The reasoning starts from a simple observation: the search for cost reduction pushed companies to call on increasingly distant subcontractors geographically and even culturally.

This organizational evolution of the upstream logistics chain is due to And as a consequence the advent of information systems, which on the one hand led to and enabled this distance, and on the other hand were called upon for this objective of better management of relationships with distant suppliers.

The most telling example is that of the outsourcing of developers, with whom communication is essentially done via digital. But there are other cases where we have to outsource part of our activity, or quite simply to supply ourselves with services or goods in a relatively distant space-time, and digitalization provides solutions in terms of fluidity.

Speed, management and cost minimization

In a context of crisis and increased competitiveness, upstream logistics constitutes a major keystone in terms of competitive advantage. Whether in B2B, in the e-commerce or distribution sector, the fall in prices and profits has led companies to rethink the management of their stocks with a view to making as many savings as possible, while providing remarkable flexibility to their customers (stock returns, after-sales service, reduction in delivery times and delays).

In such a context, where everything is moving extremely quickly, information systems constitute a new strategic tool for businesses, who achieve excellent downstream management performances, and who must therefore seek to do the same upstream, in particular by learning to fine-tune their violins with their suppliers.

The advantages of mastering upstream information systems

Improve the quality of the supplier network

The exploitation of efficient information systems by companies can help to qualitatively improve their network of suppliers. This is done in particular by selecting suppliers according to traditional criteria – deadlines, quality, costs – but also according to the criterion of digital mastery.

A supplier's enthusiasm for new technologies and for improving its communication with its customers constitutes an advantage for the contract which unites it with the client company. In fact, select the supplier based on their mastery of new technologies, it means being one step ahead of your competitors, and it therefore improves the quality of its network.

Example of successful digitalization in a market traditionally reluctant to digitize: the Ankorstore marketplace.

Better communication between the company and its suppliers

There mutual control of information systems and digital technology by the company and its suppliers has the direct effect to improve communication. Apart from the transitional period of the establishment of a technological bridge between the supplier and its customer, digital is in essence a formidable communication tool supposed to improve understanding between the different parties, and create an increasingly close relationship. collaborative.

The relationship between the company and the supplier would therefore change from a logic of customer to subcontractor towards one relationship of a much more collaborative nature, based on trust and the search for long-term benefits. This type of relationship, the benefits of which in terms of efficiency have been known in the managerial environment for some time now, would constitute an undeniable asset for the company.

Measured and tailor-made supply management

One of the obvious consequences of the mastery of ICT by the company and its suppliers lies in a good better purchasing management, because dosed according to the needs of the business. This dosage, enabled by new technologies, is not only precise but above all flexible and rapid, which leads the logistician to efficient flow management.

Some limits to the importance of the weight of digital in the selection of suppliers

Classic criteria remain predominant

Studies show that basic criteria, such as costs, deadlines and quality, are still prioritized by companies, which still take second place to the supplier's mastery of ICT. Conversely, geographical proximity no longer appears to be an important criterion at all, even if, in my opinion, we are in the process of coming back.

Digitalization on the supplier side is costly

If suppliers are enthusiastic about modernizing their information systems, the financial aspect can quickly deter some, including the most modest structures, but also the largest bureaucratic organizations.

In addition, investment in digital represents a cost whose return is sometimes not easily quantifiable.

How do we identify the digital tools we need?

Whether for your own business or for choosing the best supplier, it is always complicated to choose which tools should be prioritized or not. We quickly fall into gimmicks and underestimate our primary needs.

The question of which digital tools to prioritize, for which sector, and for what type of suppliers, does not necessarily have a clear answer.

Conclusion

The control of information systems by companies in their upstream logistics chain constitutes a major strategic challenge for the future, particularly in the development of cooperative relationships and in improving their supplier networks. It remains to be seen how to support subcontractors in this modernization process, and which information systems should be favored depending on the type of business...