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A strategic success factor for your supply chain
Supplier Management
Security of supply, quality and cost efficiency start with your suppliers. Today, strategic supplier management is far more than an operational procurement process – it is a lever that directly impacts your balance sheet and income statement. Strained supply chains, cost pressures and volatile markets make systematic supplier management a decisive success factor for profitability and growth.
valantic helps you build a strategic foundation for supplier management, manage it operationally and consistently digitalize it.
What is supplier management?
Supplier management is the strategic and operational approach to managing supply chains, with the aim of using clear processes and standardized methods to safeguard a company’s long-term value creation, quality and sustainability.
Professional supplier management covers three key areas:
Strategic supplier management
Building a high-performing supplier portfolio, ensuring quality and security of supply, and establishing the organizational structures for lasting success.
Operational supplier management
Optimizing master data and contract management, managing processes for maximum efficiency, and maintaining end-to-end portfolio management.
Supplier evaluation & performance measurement
Systematically capturing and managing delivery performance using meaningful KPIs such as OTIF – the foundation for fact-based supplier decisions.
Regardless of industry or company size, structured supplier management lays the foundation for stable supply chains, competitive prices and audit-ready processes.
Why professional supplier management is essential today
Geopolitical crises, skills shortages across industries and disruptive market developments have shown that companies that do not manage their suppliers systematically risk supply gaps, quality issues and unnecessarily high levels of tied-up capital. A targeted approach to supplier management offers four key benefits:
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1
Security of supply in volatile markets
A high-performing supplier portfolio is your most important safeguard against supply disruptions. By identifying risks early and systematically diversifying your supplier base, you reduce out-of-stock situations and ensure product availability for your customers.
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2
Cost optimization through transparent evaluation
Companies that can assess their suppliers objectively negotiate from a stronger position. Transparent performance data reveals weaknesses and provides the basis for fact-based supplier discussions – rather than decisions driven by gut feeling.
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3
Quality and legal compliance
Systematic supplier management ensures that all quality, legal and company-specific requirements are met – for example, those under ISO 9001, the Critical Infrastructure Umbrella Act or the Supply Chain Due Diligence Act (LkSG). Audit readiness becomes a strategic necessity rather than an afterthought.
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4
Efficiency and automation
Continuous supplier development instead of ad hoc measures, standardized workflows instead of manual Excel spreadsheets: Digitally supported supplier management reduces effort, accelerates decisions and frees up time for strategic tasks.
Supplier management in figures: Insights from our study
Our cross-industry study “The entire business benefits from high-performing suppliers” shows that awareness and reality remain far apart in supplier management – leaving significant potential untapped.
around 60%
of companies pay considerable or very considerable attention to their delivery performance – the remaining 40% systematically leave potential untapped.
about 15%
do not track any KPIs to measure supplier performance – without a data foundation, targeted management is simply impossible.
only 52%
of companies measure both on-time and in-full delivery. Only this OTIF perspective provides full transparency.
only 11%
use contractual penalties to address underperformance – an often underestimated tool for managing performance.
Practical experience from numerous projects confirms the impact: Improving delivery performance by just 1 percentage point typically leads to an inventory reduction of around 0.8% and an increase in revenue potential of 0.4% to 0.8%.
Download the full study free of charge!
Download the german study “Von leistungsfähigen Lieferanten profitiert das gesamte Geschäft” now – also published in MM Logistik.
Download the study
Download the study
The OTIF KPI in supplier management: Taking control of delivery performance
OTIF (On Time In Full) is the central KPI in modern supplier management. It measures how often orders reach the recipient on time and in the correct quantity. Three calculation methods have become established in practice:
- Order Fill – the strictest method. Measures delivery performance based on orders fulfilled in full, both on time and in the correct quantity.
- Case Fill – a more granular assessment at the level of each order line. Particularly common in retail.
- Volume Fill – measures the proportion of the total order volume delivered on time and in full.
The right method depends on numerous factors, including transport mode, Incoterms, product range and industry standards. Our proven framework helps you select the right OTIF logic for your company and embed it for the long term.
Three methods, three results: Depending on the calculation logic, the same data can produce an OTIF rate of 0%, 60% or 75%.
Expert article “Systematisch die Lieferantenperformance steuern” in Beschaffung aktuell
Discover how OTIF works in practice and which levers are particularly effective in the expert article “Systematisch die Lieferantenperformance steuern”, published in beschaffung aktuell.
Read the article
Read the article
12 supplier management consulting areas
We help you optimize your supplier management with a range of services across twelve consulting areas, from a quick check to portfolio management. Individual areas can be mixed and matched at any time to fit your maturity level and goals. Our offering is organized into four focus areas:
Quick check
Assessing your company’s current level of supplier management maturity as the starting point for targeted measures.
Portfolio management
Strategic analysis and segmentation of your supplier portfolio to optimize your supplier base.
Risk management
Identifying and assessing supply chain risks to prevent and safeguard against supply shortages and disruptions.
Supplier selection & classification
Classifying your suppliers according to their strategic and financial importance to identify and select key suppliers.
Supplier evaluation
Defining objective evaluation criteria and methodologies for consistent, fact-based supplier performance management.
Supplier audits
Systematically assessing your suppliers’ processes and capabilities through targeted audits.
Delivery performance measurement
Systematically capturing and measuring delivery performance using the OTIF KPI to track on-time and in-full delivery.
Operational supplier management
Managing suppliers and supplier processes operationally, including master data and contract management, to keep operations running smoothly.
SRM tool selection & implementation
Selecting and implementing an SRM tool to digitalize and automate your supplier management.
Supplier development
Defining specific measures and timelines to strengthen supplier performance in a targeted way.
Quality management
Improving supplier quality using proven methods such as Six Sigma.
Supplier discussions
Supporting you in preparing and conducting professional supplier discussions.
Supplier management across industries
Success in practice
valantic combines top management consulting with hands-on implementation expertise in procurement and supply chain management. Our industry experience ranges from grocery retail and specialty chemicals to European airport operators.
Retail & e-commerce
From fashion retailers to grocery retailers, we improve delivery performance, standardize supplier management processes and optimize supplier portfolios. Typical results include a significant improvement in delivery performance through the introduction of OTIF management, as well as substantial efficiency gains from a streamlined portfolio.
Public procurement
In regulated procurement, we enable audit-ready supplier management with clear evaluations and traceable decisions – for German broadcasters, gas infrastructure companies and leading European airport operators, among others.
Industry & manufacturing
For manufacturers ranging from specialty chemicals companies to a world-leading provider of industrial adhesives, we establish robust supplier management structures with measurable impact – including cross-functional evaluation processes and SRM tool implementation.
Frequently asked questions about supplier management (FAQ)
Supplier management is the strategic and operational approach to managing supply chains. Its aim is to use clear processes and standardized methods to safeguard a company’s long-term value creation, quality and sustainability.
At its core, SRM is the digital and process-based implementation of supplier management. While supplier management describes the overarching concept – strategy, management, evaluation and development – SRM often refers to the tool landscape and operational collaboration processes with suppliers.
OTIF stands for “On Time In Full” and measures how often orders are delivered on time and in the correct quantity. OTIF can be calculated using three methods: Order Fill (orders fulfilled in full), Case Fill (order lines) or Volume Fill (quantities).
Improving delivery performance by 1 percentage point typically leads to an inventory reduction of around 0.8% and an increase in revenue potential of 0.4% to 0.8%. Further benefits include greater security of supply, cost optimization and competitive advantages.
Key metrics include OTIF (on-time and in-full delivery), complaint rate, replenishment lead time, Total Cost of Ownership and qualitative assessments from supplier audits.
Common tools include Supplier Relationship Management (SRM) systems, procurement suites and specialized performance management tools. We support you with both tool selection and implementation.
Take your supplier management to the next level
Whether you need a quick check, OTIF implementation or a comprehensive supplier strategy, we work with you to find the right approach. Let’s discuss your specific supplier management challenges in a free initial consultation.
Nico Gösser
Principal
valantic
- Supplier Management
- Procurement Process
- Purchasing Optimization
- OTIF