The value of the BirchStreet application is maximized when all of an organization’s spend is channeled through the system. Compliance to supplier contracts and brand standards, greater fiscal control, and the ability to aggregate spend for analysis and to find future contracting opportunities are key to managing your supply chain.
However, you can’t measure or manage what you don’t capture.
To this end, BirchStreet understands the importance of on-boarding a customer’s supply base, and that the supplier community is extremely varied in size, complexity and level of sophistication. What makes BirchStreet unique is our ability to offer multiple solutions for our customers to connect to their suppliers.
Worldwide, BirchStreet is connected to over 160,000 suppliers. These suppliers include multi-national, national, as well as thousands of regional, local and specialty suppliers, whose products and services span everything from food & beverage, to MRO, OS&E and FF&E providers, to one-off custom products and design houses. Each supplier has unique challenges and needs. For example, many food suppliers operate on very short cycle times: customers order daily for next morning delivery making visibility into a supplier’s product availability critical. Suppliers providing food commodity products such as meat, poultry and seafood experience frequent price changes based on market conditions. For these products, weekly or even daily price changes are the norm and require the ability to update prices frequently and efficiently. Other suppliers that provide manufactured products or case goods may have longer cycle times and far less frequent price changes. Still, other suppliers may build custom products on demand. In these cases typically buyers need a biding technology such as BirchStreet’s Request for Quote (RFQ) module to select the vendor before submitting the order. Other factors such as the size of the catalog, the level of technical sophistication of the supplier, the maturity level and consolidation level of the supply chain affect how buyers will interact with suppliers.
BirchStreet realized early on that in order to support both the supplier and buyer communities, we needed multiple options for on-boarding suppliers that made sense to both groups. To that end, BirchStreet has developed six basic ways to integrate with suppliers. BirchStreet’s six basic supplier integration approaches are:
Supplier Integration Methods
- Adopted Catalog Suppliers
- Punch-out Suppliers
- Punch-Through Suppliers
- Program Suppliers (adopted supplier, non-catalog)
- Suppliers-on-the-Fly (local suppliers)
- Custom Interfaces
These integration approaches define how a supplier interacts with BirchStreet and the buyer, how products and pricing are maintained, where catalog information is stored and the process flows available to generate and approve orders and obtain bids. BirchStreet also supports a number of Purchase Order transmission methods. The PO transmission method defines how the Purchase Order (and other documents such as Requests for Quote) is sent to the supplier. BirchStreet supports the following PO transmission methods:
Purchase Order Transmission Methods
- BirchStreet Supplier Facing Portal (supplier logs in and accepts PO online)
- Interface with Suppliers Back-Office or e-Commerce System
- Fax (BirchStreet system generated fax direct to supplier)
- Email (BirchStreet system generated email direct to supplier)
- Print (hard copy)
Let’s take a look at each type of supplier integration and consider the advantages and disadvantages from the perspective of corporate purchasing.
Summary of BirchStreet Supplier Integration Methods
1) Adopted Catalog Suppliers provide catalog content online directly in the BirchStreet e-Procurement system database. Suppliers maintain catalog content either by logging into the BirchStreet supplier portal or via an interface to their back-office or e-commerce system. These products are generally available to multiple properties or locations. BirchStreet’s rule-based Catalog Exposure feature lets the buyer contract owner control exactly what suppliers and products are exposed to which buyers. With adopted catalogs, suppliers are typically responsible for maintaining product, pricing and product image information (where applicable) so that users can access up to date pricing in the BirchStreet Catalog and Order Guides. Supplier price updates can be regulated requiring approval by the buyer contract owner before they are published to users.
- Advantages: You control the shopping process (i.e. which items are displayed to the user, and how they are displayed) so tight control of item level compliance can be achieved. Price updates as often as daily can be accommodated.
- Disadvantages: Although discontinued products and price changes can be updated as often as daily, real time (up to minute) product availability cannot be accessed from a static catalog. If access to real time availability is required a Punch-out or Punch-Through is recommended.
- PO Transmission Methods Supported: XML, Fax, Email and Print
2) Punch-out Suppliers leverage a special kind of integration between the BirchStreet e-Procurement application and the supplier’s e-commerce website. The integration allows the user to click a link on the BirchStreet Catalog Tab, which in most cases seamlessly logs the user into the supplier’s e-commerce website. All product and pricing information will be maintained on the supplier’s website by the supplier, accessible through the integrated link. These suppliers can be made available to multiple properties controlled by BirchStreet’s Catalog Exposure functionality. Upon checkout the order information is transmitted to BirchStreet and a PO is auto-generated in BirchStreet. The order is held in pending status in the supplier’s system so it can be routed for approvals in BirchStreet. Once approved, a second electronic confirmation message is sent to the supplier’s system to confirm the order. If the order requires no approval (typically the case for food orders) the confirmation is sent instantly after submission.
- Advantages: Users can leverage the features of the supplier’s website and PO data is transmitted to BirchStreet for analysis and PO approval. Real time product availability is shown online in the supplier’s website during checkout. For products that require a custom configurator such as uniforms and computers, users can use the supplier’s built-in configurator in their website. The Punch-out integration with the supplier’s website brings, item level purchasing data (POs with line items) back into BirchStreet for spend analysis.
- Disadvantage: Since the shopping experience is on the supplier’s website you may lose some control over the shopping process and item level compliance can suffer as suppliers may expose unwanted products to your users. The level of control a buyer can enforce will vary based on their relationship with the supplier and/or each supplier’s ability to suppress specific products or categories within their site. You also do not have access to a catalog of unpurchased products which is useful for recipe costing or after-the-fact catalog price analysis. In some cases separate price files can be obtained from the supplier to fill this gap.
- PO Transmission Methods Supported: XML
3) Punch-Through Supplier interfaces combine the best of the Adopted Catalog approach and the Punch-out approach. As with an Adopted Catalog Supplier, the supplier maintains an online catalog in the BirchStreet database. The buyer shops for products using BirchStreet catalogs and/or order guides, thus providing a high level of control. Upon final approval the PO is submitted and transmitted to the supplier in a XML message to the supplier’s website. At this point the user is seamlessly logged into the supplier’s website like a Punch-out, but the user is sent directly to the checkout process on the supplier’s website. During checkout the order is processed against the supplier’s inventory availability. If some items are not in stock the user can choose to substitute items or remove those items from their order before final checkout. The buyer is restricted form purchasing additional items during this process.
- Advantages: You control the shopping process including exactly what items are displayed to the user and how they are displayed, so tight control of item level compliance can be achieved. Real time product availability is typically shown online in the supplier’s website upon checkout. You get both item level consumption data and catalog data in BirchStreet for analysis and recipe costing.
- Disadvantages: Many suppliers do not support the Punch-Through. Final order can be different than the approved order.
- PO Transmission Methods Supported: XML
4) Non-Catalog (Program) Suppliers are suppliers that have been approved by the buyer’s organization and visible to multiple properties. Non-Catalog (Program) Suppliers do not provide catalog content in BirchStreet. There are many reasons why they may not have a catalog, such as the supplier provides services or custom made products that don’t lend themselves to a catalog.
- Advantages: Users across multiple properties can transact with Program suppliers online even though there is no online catalog content. The supplier is authorized and set-up once by the buyer’s organization.
- Disadvantages: Users must setup and maintain products and pricing.
- PO Transmission Methods Supported: Fax, Email, Print
5) Suppliers-on-the-Fly(SOTF) suppliers are typically unique to a given property, office or location. They are usually local vendors that do not maintain product catalogs in BirchStreet. Suppliers-on-the-Fly and their products or services can be added at any time by users with the appropriate security access. However, many customers choose to require new vendors added this way go through an internal approval process prior to activation and this can be setup using the BirchStreet workflow engine. This process can be setup using the BirchStreet workflow engine. In these cases the SOTF creation screen becomes a new vendor request screen and is routed to corporate purchasing and/or accounting for consideration and activation. Other customers create (and deactivate such vendors) via an automated interface between BirchStreet and the buyer’s back-office accounting system.
- Advantages: If desire, you can allow your users to create their own local suppliers, allowing you to capture all spend through the system for analysis. You can isolate and report SOTF purchases (including line item detail) for new opportunities for supplier contracts or to curtail non-compliant spend.
- Disadvantages: Users must setup the supplier and maintain products and pricing. No real time product availability information is available. PO transmission method is limited to Fax, Email or Print. If two or more properties use a given supplier, each property must separately create the supplier for their own property. If multiple properties plan on using the same supplier it’s better to use the Program Supplier or Catalog Supplier approach.
- PO Transmission Methods Supported: Fax, Email, Print
6) Custom Interfaces are typically used instead of a Punch-out when the supplier is technically unable to support a true Punch-out. When implementing a custom interface like this, we strive to provide as much functionality as possible, but we are limited by what the supplier’s system can support.
- Advantages: Typically allows a supplier integration even though a true Punch-Out is not achievable.
- Disadvantages: Typically, orders cannot be routed for approval before they are committed.
- PO Transmission Methods Supported: Varies depending on supplier technical capabilities
Supplier Adoption Services: The process of onboarding your suppliers onto BirchStreet is what we call “Supplier Adoption”. We have a dedicated Supplier Adoption team that provides this service to our customers as part of our implementation services.