Supplier e-sourcing: finding the best partners for your business

What is supplier e-sourcing?

Like sourcing, e-sourcing involves identify suppliers offering the best value for money and the best terms and conditions .

This is of paramount importance because, according to ADEME, purchases represent 50% of a company's sales .

Its difference from e-sourcing lies in the use of the Internet and information technologies in the process .

E-sourcing means electronic sourcing . In French, this is known as electronic supplier research. It's a form of sourcing that uses digital tools to optimize procurement and purchasing processes within a company.

E-sourcing simplifies the work of a company's purchasing department. The latter use specialized platforms and B2B marketplaces to find the best-performing suppliers.

A high-performance supplier has 3 characteristics:

• Reliability of supply

• Product quality

• Affordable costs

Sourcing helps identify the right suppliers. E-sourcing, on the other hand, is a mechanism for optimizing this process.

The benefits of e-sourcing

E-sourcing offers the following advantages:

• Simplify and improve the traditional sourcing process for maximum efficiency . The use of high-performance tools automates the sourcing process.

• Promote better collaboration with suppliers . E-sourcing tools can be used to foster supplier relations.

• Save time searching for suppliers . The e-sourcing platform centralizes information on the various service providers available. This makes it quicker and easier to compare them.

• Access to a wide range of professionals . Traditional sourcing pitted 5 or 6 suppliers against each other. With e-sourcing, you have access to hundreds of suppliers.

With e-sourcing, you can say goodbye to supply difficulties, because you have alternatives at your fingertips that can replace your current supplier in the event of failure.

• Compete with other potential suppliers. E-sourcing gives you access to a wide choice of business partners. This gives you the opportunity to select the one that offers the best value for money.

• Promoting sustainability and social responsibility criteria . Companies can better identify suppliers with the best environmental and social practices.

• Better manage supply-related risks. E-sourcing offers better tools for evaluating suppliers in terms of their financial stability and ability to deliver. This enables the purchasing function to take appropriate action in good time.

Key stages in the e-sourcing process

Here are the main steps in the e-sourcing process:

Identify your company's needs

As with any sourcing process, the first step in e-sourcing is to identify the company's specific needs . It is on the basis of these that you will be able to draw up a list of relevant criteria for selecting your suppliers.

Depending on your needs, you can then establish criteria such as :

• Product quality

• Geographical location

• Customer service responsiveness

• Production capacity

• Delivery times

• The degree of compliance

• Skills required

• Compliance with labor and/or environmental standards etc.

This list of criteria is the first step in pre-qualifying suppliers.

Search for suppliers online

As this is e-sourcing, the search is carried out mainly on the Internet or via technological means.

Here are the different channels used for this purpose:

• Online directories such as Alibaba, Amazon, Europages, Kompass or Pagespro. These can be general or sector-specific directories.

• Search engines and especially the most popular of them all: Google. Just type in the right keywords to find suppliers in your sector. And don't hesitate to search far and wide, as supplier sites are rarely optimized.

• Les marketplaces comme Alibaba

• Professional networks such as LinkedIn

Evaluating potential suppliers

E-sourcing tools should enable you to find a list of suppliers that meet your company's needs. From now on, it's all about evaluate each supplier according to a list of criteria that you have drawn up, including

• The proposed price

• Product/service quality

• Compliance with standards

• Delivery times

Negotiating and selecting suppliers

Once the short-list of suppliers has been drawn up, it's time to negotiate the final selection. This stage involves to adjust and match offers and conditions.

At the end of this stage, the final supplier is selected after a cost-benefit analysis .

E-sourcing tools and platforms

E-sourcing uses electronic platforms.

The main e-sourcing platforms

Here are the main e-sourcing platforms you can use:

• Alibaba . It is one of the leading platforms for international supplier research. It features million suppliers in sectors ranging from clothing to industrial products and electronics.

You can find suppliers using filters: keywords, personalized recommendations, product categories, etc. You can select suppliers based on comments and ratings left by other users.

• ThomasNet . ThomasNet is the ideal directory for finding suppliers in the USA and Canada. It features nearly 50,000 suppliers. However, the range of products offered is limited. It mainly features industrial and agricultural supplies, and electronic equipment.

• GlobalSources. It's a great alternative to Alibaba for finding suppliers all over the world. Its products are less diversified than those of the Chinese giant. The platform does, however, emphasize quality and conformity.

GlobalSources' strength also lies in its supplier verification system, making your search more secure.

Criteria for choosing an e-sourcing platform

Each platform has its own strengths and weaknesses. It's by weighing up the pros and cons of each that you can make an informed choice.

Here are the criteria you can use to choose your e-sourcing platform:

• Type of products required . Platforms have their own policies when it comes to selecting suppliers and products. So you need to ask yourself whether you need access to a wide range of suppliers, or whether a handful of high-quality suppliers will suffice?

• Order volume . Are you looking for suppliers with high production capacity?

• Risk tolerance . Are you prepared to take the risk of encountering unreliable suppliers, or do you want to work with a platform that has a strict supplier verification policy?

• Budget . Is price the deciding factor for you, or are you prepared to pay more for guaranteed quality and conformity?

Integrating e-sourcing into the purchasing process

Given the many advantages of e-sourcing, many companies have already decided to adopt it as part of their purchasing process. All you need to do is adopt the necessary technological tools including purchasing management software, e-procurement software, etc.

These different tools will enable you to automate various aspects of your purchasing process, including :

• Launching calls for tender

• Negotiation

• Gathering information on suppliers

• Etc.

Best practices for successful supplier e-sourcing

Here is a compilation of best practices for successful supplier e-sourcing:

Building trusting relationships with suppliers

Choosing a reliable supplier is one thing. Likewise, the constant search for competitive suppliers is a necessity. However, there's no such thing as a long-lasting, solid partnership with your current suppliers. This is a foundation of stability for the company, which can count on a quality supplier that honors its commitments.

On the other hand, it's also the key to trusting business relationships . You can easily obtain payment facilities from a long-standing supplier, or any other advantageous arrangement.

Ensure product conformity and quality

The quality and conformity of the products you market is crucial for any company wishing to develop its reputation and preserve its image. That's why you need to implement a permanent framework for assessing your suppliers in terms of quality and compliance with standards.

This involves carrying out a supplier audit. In other words, it involves carry out a diagnostic to assess the supplier's ability to ensure the quality of the products/services it provides . In the event of non-compliance, corrective measures must be proposed to rectify the situation.

Monitor and evaluate supplier performance

Sourcing is a continuous process within a company. You need to constantly assess whether your suppliers are complying with their specifications. The smooth running of your procurement process depends on it.

Any failure must be punished, and the company must be able to react in time. Hence the importance of continuous sourcing to find truly reliable suppliers.

Pitfalls to avoid in supplier e-sourcing

It's also important to avoid certain pitfalls in your supplier selection process.

Rely on price alone

Reducing costs is certainly one of the key objectives of the supplier selection process . However, price alone is not sufficient to attest to a supplier's quality. The price criterion must be combined with other criteria, such as :

• On-time delivery

• Quality and compliance

• Geographical location

• Etc.

Focusing on price at the expense of quality seems to be a strategy doomed to failure.

Ignoring cultural and linguistic aspects

If you use the Alibaba platform, for example, you're likely to come across Chinese suppliers. The language and cultural barriers are such that you need to adopt a specific communication strategy to deal with them.

If you want to optimize the efficiency of your supplier selection process, this aspect should not be overlooked.

In a nutshell, e-sourcing improves the efficiency of supplier sourcing. It saves time, reduces costs, improves risk management and optimizes the process. However, it's important to define the selection criteria carefully, to ensure that they are targeted appropriately and that the sourcing process is efficient.