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Are your suppliers’ certifications compliant? Are you buyers being productive? Do you have visibility to your teams sourcing activity? How do you manage all your supplier relationships?

If you are a manufacturer, these are all probably common questions that you ask. In most cases, all this relevant data is scattered across different systems & platforms because managing suppliers has traditionally been done through hundreds of emails, phone calls, PDF’s, and spreadsheets between your organization and the supplier. As time goes by and your company grows, this information becomes significantly more difficult to find, access and use for buyers & sourcing teams.

Sourcing at the core is finding a good supplier, which might sound easy. But, for most companies like yours, you probably have a standard/requirement for your expectations on cost, quality, and delivery from your suppliers. This is where sourcing can become extremely difficult – weighing all those factors into a decision to select the best source/supplier. On top of that, COVID has added a twist to sourcing – inability to travel, the importance of diversification of supply base & emphasis on near sourcing.

What if there was an easier way to manage suppliers and optimize the way your sourcing and procurement teams work?

eSourcing, also known as “electronic sourcing”, allows all those same traditional sourcing tasks to be conducted however on a centralized, web-based platform instead of manual conversations & exchanges. This allows organizations like yours to have a full visibility to quoting history and more importantly, allows sourcing teams to act faster, with more information and make better decisions. The implementation of digital sourcing tools can help in many ways like:

  • COLLABORATION – centralizes the location for different country or functional teams to discuss and collaborate on quoting activity as well as part information that is accessible across all departments/teams within your organization
  • TRANSPARENCY – allows all parts of your organization to have access to a single source of truth for sourcing and supplier information
    STANDARDIZATION – creates more structure around sourcing workflows to ensure consistency across the organization
  • SCALE – allows sourcing departments to more efficiently manage large volumes of data to yield better insights and drive better sourcing decisions

Over the last 2 years, if there is anything we learned – it’s that we must be ready for the unexpected and this just emphasizes the importance of having digital sourcing strategies that can be agile and efficient, which is one of the biggest benefits of eSourcing.

Many of the progressive industrial companies in the world have successfully digitized their CRM processes using software like Salesforce and others. But their Sourcing and Supply chain teams still use archaic excel, email, and PDF tools to engage in communications with their suppliers, conduct commercial exchanges, and manage contracts & certifications through the full life cycle relationship with the suppliers. 

SRM is defined as a Supplier Relationship Management system. Like CRM, SRM can enable the enterprise to manage relationships with their suppliers through their entire life cycle. Various roles that can benefit from having a system like an SRM include Supplier Account Manager (SAM), Commodity Managers, Director of Sourcing, Sourcing Managers, Director of Supply Chain, and, more broadly speaking, any team member engaged in a Buyer/Planner role. For the sake of this paper, we will refer to them as “buyers.”

Buyers conduct activities with suppliers broadly categorized into two forms of activities. The first set of actions is what we refer to as “pre-sourcing” or “pre-award.” The second set of activities comes after the award, “post-sourcing,” and typically involves current or strategic suppliers for an organization. 

A] Pre-Sourcing – Buyers across any industry, vertical, or business unit, spend considerable time evaluating new suppliers. These activities include sending RFQ (Request for Quotes), RFP (Request for Proposals), RFT (Request for Tender) to “potential” suppliers, then receiving their responses, analyzing them, and sharing results & recommendations to management teams for decision making.

Supplier evaluations include a variety of sourcing audits, quality audits, certification verifications, third-party audits, commercial agreements, and other pre-award activities BEFORE the company’s management decides to do business with this specific supplier/partner. In this phase, suppliers are usually referred to as “Prospective” or “Potential” suppliers.

B] Post Sourcing – Once a company has decided to engage in business with a supplier, suppliers are generally grouped into two categories: Current or Strategic suppliers. While pre-sourcing activities can take anywhere from a few months to a year, post-sourcing engagement and relationships between customer & supplier can last for years and often decades. 

The “post-Sourcing” phase is typically divided up into two broad activities:

1] Contracts and Agreements – These include but are not limited to payment terms, location information, contact information, capabilities updates, warranty contracts, performance contracts, stocking agreements, indexed services, and much more. Some of these tasks are included in the “pre-award” activities like adding supplier info into ERP/MRP & supplier management systems. 

2] Once suppliers are added to the system, operational buyers communicate and interact with supplier partners. As months and years go on, there are various activities conducted with suppliers, which may include but are not limited to quarterly business reviews, annual reviews, annual contracts, certification changes and updates, and Supplier performance management reviews (SPR/SPM) and other strategic & tactical reviews. 

Supplier Relationship Management should offer the ability to store a wide array of these contracts and documents. One common lapse for many OEM and Tier 1 suppliers is not having up-to-date certifications from suppliers. An effective SRM should offer an ability to track activities, manage processes and share information between suppliers and customers in a centralized, efficient manner.

MESH is built upon years of experience in buying forgings, fasteners, castings, raw materials in different forms and assemblies.

Automotive, agriculture, aerospace, lighting, and general industrial customers have teams of buyers who communicate with their suppliers sending drawings, specifications, and standard templates to see the cost drivers from supplier quotes.

MESH allows buyers and commodity managers at these companies to build assembly or component level RFQs easily and quickly because of pre-built material tables, quote breakdown sheets, and ready supplier libraries. All communications with suppliers are done within the portal. Buyers can keep all information updated and be assured that all suppliers are working on the same sheet of music!

When specification changes or drawing changes as designs mature and move further into production, buyers can keep refreshing the quote and update supplier quotes to new specifications.

At the time of sourcing, buyers can avail of MESH tools to analyze and break down costs, negotiate with suppliers, or get clarifications from them, saving hundreds of hours of unproductive time emailing and refreshing the quotes.

Most of the systems outside have the same framework of quotes and templates, whether they buy million-dollar machines or forty-cent fasteners. MESH offers custom templates for various commodities and materials to allow more tailored feedback from suppliers, which can be readily analyzed with a high degree of confidence.

MESH also offers the My Parts library and My RFQ, which allows the buyer to send parts for quick pricing reviews.

MESH also offers a supplier management capability where the supplier will be asked to keep their certifications updated – 30 days, five days, and the day before they expire. This feature can save hundreds of hours in follow-ups for buyers and managers to keep their supplier’s information current and compliant.

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