Instead of a thousand emails: how a supplier portal makes assortment management simpler and more transparent

25.12.2023 Original article published on retail.ru→ We explain how a supplier portal helps automate routine tasks in supplier operations.

Here is a checklist of signals that it is time to implement this solution. Reading time: 11 min.

This article is primarily aimed at retailers that work with 10 or more manufacturers and product suppliers.

It can also be useful for other industries, since regular procurement exists in healthcare, construction, and even IT.

Like any information product, a supplier portal is not a universal solution that fits everyone and every situation.

There is no point in planning its implementation for the distant future: business is always a complex environment where the input conditions constantly change.

Based on their work with retailers, KT.Team specialists identified several common signals that show it is time to automate supplier operations.

You are selling a product at a price that is close to the purchase price because you did not receive updated supplier prices in time.

This happens when supplier interaction is organized through email.

Another email with updated prices ends up in spam and triggers a domino effect: your managers do not enter the new purchase prices into the company's systems, so nobody adjusts the final customer prices. And now, instead of profitable products, you have loss-making ones on the shelves.

Suppliers do not send updated package photos, or they send them in poor quality, or your managers do not have time or forget to update the photos on sales channels. As a result, customers order, for example, windshield wipers for their car in red packaging and receive them in transparent packaging, and cannot tell whether they got the right product or who is misleading them.

The product has already been added to the shelf, but the warehouse cannot receive it.

The truck with the first batch of goods from a new supplier has already arrived at the warehouse, but the warehouse cannot accept it because the systems are missing data. For example, information about package dimensions, storage conditions, or product compatibility is absent.

The supplier's manager did not provide this information, the email with it was lost, or the information did not reach the warehouse systems on time - the reason can be anything.

But the result is the same: you are already selling the product online, but it is still not in the warehouse.

You can decide to implement it before errors start affecting your business: just look at two simple metrics.

The first is the number of regular suppliers.

Working with more than 10-20 companies? It is worth considering implementation.

If the number of managers interacting with suppliers (the second metric) is greater than three, the interaction process becomes less and less manageable and increasingly vulnerable.

Interestingly, the number of SKUs practically does not affect the need for a portal.

At 10,000 and at 100,000 SKUs, the likelihood that it is time to automate supplier workflows is about the same.

On the supplier side: the manager downloads a template for adding new assortment from the personal account, fills it out, and then uploads the file.

If the supplier has a mature IT infrastructure, they can integrate their systems with the portal and prepare assortment selections in a familiar interface.

If the file sent is missing something needed to add products to the retail assortment or online storefront, or even to receive them into the warehouse, the portal immediately flags the missing data.

The system will highlight what is missing and where, or which information has been provided in the wrong format.

On the retailer side: employees receive notifications that new assortment has been added.

They can review and accept or reject both individual items and product groups, depending on the current assortment policy, pricing policy, and so on.

Until the retailer's employees process the proposed items, those items will remain highlighted in the list.

Instead of a chain of four or more emails, one unified interface.

It is immediately clear which information is missing - the supplier can add it while uploading the assortment or request the data from other departments.

So, you have determined that a supplier portal could be useful for your company. What should you do next?

First, take stock of the supplier interaction processes you currently have:

Which departments interact with them?

How are contracts concluded?

What data is needed to add products to the retail assortment offline and online? What data is needed to receive them into the warehouse?

How do you receive information about changes in a supplier's assortment, and how do you receive information about changes in product parameters, such as price changes?

Second, start working with the development team you will trust to implement the supplier portal.

This can be either an in-house team, if you have a mature IT department with the right expertise, or an external contractor. By this point, you already have a description of your processes and bottlenecks, and you can show the development team the overall picture of what you want to improve through automation.

This does not mean that the development team relies only on the data you provide at the start. For example, before preparing a proposal and especially before starting implementation, KT.Team conducts several in-depth interviews with the client's departments.

The project team asks questions about process details based on its previous experience with similar projects.

This is needed to choose the right solution for your needs: whether the portal should be built on an off-the-shelf product such as Adobe Commerce (formerly Magento), Bitrix, or Saleor, or whether your processes are so specific that custom development in PHP or Python would be a better fit.

The third stage is developing the project's MVP, which will make it possible to achieve the first tangible win by automating one supplier workflow.

An MVP is usually ready 2-3 months after development starts.

After that, you can onboard the first users to the portal: pilot suppliers (we recommend choosing several companies with which you have the best relationships) and managers.

They will help optimize the onboarding process for future users and improve the portal's own workflows.

Based on our experience, user training takes no more than a week: the manager's personal account, both on the buyer's side and on the supplier's side, looks simple and clear because it uses familiar application interface elements.

In parallel, and this is already the fourth stage, you can work with the implementation team on a roadmap for the portal's further development.

What other processes and functions will you automate, over what timeframe, and what other supplier workflows can be improved?

It is worth noting separately that, unlike an online store, for example, a supplier portal is a project with a finite development timeline.

Even if you move 10, 20, or 30 supplier workflows into a single window, at some point the non-digitized processes will end. Then only the portal itself and its related integrations will need support. By the way, for integrating the supplier portal with other company systems, we usually recommend using an intermediate integration layer, an ESB bus.

This solution makes it possible to integrate any systems regardless of stack or data format, without rewriting integrations every time the systems are updated or the way data is stored changes.

You can read more about ESB in KT.Team blog articles→.

It will take 2-3 months from the start of work to launch the first supplier portal functions.

Add the stage of choosing a developer, negotiating, and signing the contract. But the processes need improvement now.

This eliminates the situation where the absence of a specific manager (ill, away from the city without communication, or resigned) leads to supplier information being lost or updated too late.

Now emails will arrive at a single address and be forwarded to the managers who are currently available.

Another simple step is to set up notifications in messengers.

A new email lands in the corporate mailbox created for working with the supplier, and the manager receives an additional notification about it.

It becomes harder to lose such an email.

You can also create Kanban boards in your own systems.

A new email from the supplier will trigger automatic task creation and assignment of a responsible manager to that task.

On a Kanban board, you can set notifications if a task stays in one status for too long.

These tools will help reduce losses and quickly optimize part of supplier-related processes before development begins or in parallel with it.