The Five Pillars of an Effective Supplier Management Program

Across industries like financial services, life sciences and manufacturing, the challenges regarding supplier management are intensifying.

According to the 2025 BDO Life Sciences CFO Outlook Survey, for example, life sciences CFOs are contending with supply chain and manufacturing challenges, including the looming threat of tariffs and the Biosecure Act, which could disrupt the sourcing of materials for drug development.

Other challenges include:

• Cost pressures
• Increasing cybersecurity risks
• Stringent compliance requirements
• A lack of visibility into supplier performance and spend.

A robust supplier management program is essential for addressing these challenges and driving financial performance.

By implementing a structured, proactive approach to managing supplier relationships, your organisation can gain control over costs, ensure compliance, maximise supplier value, and build resilience into its supply chain.

What is a Supplier Management Program?

A supplier management program is a formalised, structured approach to managing relationships with suppliers across the full lifecycle from onboarding to offboarding.

It provides a framework for:

• Onboarding suppliers consistently and efficiently.
• Ensuring their regulatory and contractual compliance.
• Monitoring their service delivery performance against defined KPIs.
• Identifying and mitigating the risks they present.
• Building collaborative partnerships with them.
• Ending the relationships as smoothly as possible.

These outcomes are essential for protecting the bottom line, particularly for organisations in regulated industries.

They can be difficult to achieve, then maintain, using traditional manual or spreadsheet-based methods. If your business is still using manual methods to support its supplier management program, it raises the possibility of:

• Cost overruns and inefficiencies: Duplicate spending, maverick buying, and a lack of visibility into supplier costs can erode profitability.
• Financial risks: Non-compliance penalties, data breaches, supply chain disruptions, and supplier failures can result in significant financial losses.
• Negative impact on profitability and shareholder value: Inefficient processes and uncontrolled risks hinder an organisation's ability to achieve its financial objectives and deliver value to shareholders.

A supplier management program is crucial because supplier issues can directly impact the bottom line, especially when the number of suppliers is growing fast.

What are the Five Pillars of a Supplier Management Program?

To maximise financial return and minimise risk, a supplier management program must be built on five core pillars. Each pillar addresses a critical component of effective oversight and is significantly enhanced by modern supplier management software like Gatekeeper.

1: Optimise and Automate Supplier Onboarding for Cost Efficiency

Inefficient and ineffective supplier onboarding processes drain resources and delay time-to-value. Manual tasks are time-consuming, error-prone and inconsistent, and hinder scalability as supplier numbers grow.

Automating supplier onboarding and lifecycle processes is crucial for achieving cost efficiency, accuracy and auditability.

By streamlining these processes, organisations can:

• Reduce administrative costs associated with manual data entry and follow-up.
• Optimise onboarding processes through availability of capabilities that remove the need for manual activities.
• Accelerate the time it takes to onboard and realise value from new supplier relationships.
• Improve data accuracy, leading to better financial forecasting and decision-making.

Supplier management software enables your organisation to streamline and automate supplier processes, dramatically reducing onboarding times and improving data accuracy.

With Gatekeeper you can:

• Reduce onboarding times and internal admin costs: A vendor portal offers a guided, self-service experience that walks suppliers through onboarding, compliance submissions, and data collection. This removes the need for back-and-forth emails and manual tracking, reducing the burden on procurement, legal, and compliance teams.
• Ensure data accuracy and eliminate manual entry: Smart Forms and custom fields ensure you capture high-quality, structured supplier data upfront. This automation prevents errors, duplicates, and incomplete submissions, reducing rework and follow-up.
• Automate approvals and compliance checks: With workflow automation, key tasks like financial vetting, compliance document requests, and internal approvals are routed automatically to the right stakeholders. This eliminates bottlenecks, enforces policy, and ensures nothing is missed, all without manual intervention.

This not only accelerates onboarding but also ensures that supplier data is accurate and up-to-date, providing a reliable foundation for future management activities and financial reporting.

2: Segment Suppliers for Maximum ROI

Not all suppliers contribute equally to an organisation's strategic objectives, or pose the same level of risk. Treating all suppliers the same leads to inefficient resource allocation and missed opportunities to maximise ROI from key relationships.

Supplier segmentation is essential for prioritising oversight based on factors such as criticality to the organisation, spend level and risk profile. By prioritising segmentation as part of your supplier management program, your organisation can:

• Prioritise the Right Supplier Relationships: Segment your supplier base by spend, risk, or operational importance to focus effort where it delivers the greatest value - whether that’s mitigating risk, strengthening critical partnerships, or optimising spend.
• Give Stakeholders Only What They Need: Customised dashboards deliver role-specific views of key suppliers, enabling faster, more informed decisions by surfacing only the most relevant data—no digging required.
• Scale Governance Without the Manual Work: Link supplier segmentation to workflows to automate due diligence, trigger risk reviews, and adjust approval levels, freeing teams from repetitive tasks and ensuring consistent, risk-adjusted processes.

Segmentation ensures that the right suppliers receive the right level of attention, enhancing their performance, mitigating risk, and maximising value for the organisation.

3: Monitor Supplier Performance for Cost Control and Value Assurance

Without clearly defined KPIs to set expectations, and a robust system for tracking achievement against targets, supplier performance can deteriorate over time.

This can lead to missed service level agreements (SLAs), decreased service quality, and reactive firefighting, all of which negatively impact costs and profitability. Gatekeeper's robust performance management capabilities provide the transparency and accountability needed to drive continuous improvement in supplier performance and ensure cost control. For example, Gatekeeper allows you to:

• Drive Supplier Performance That Aligns with Your Goals: Balanced scorecards give you a 360° view of supplier performance across quality, delivery, compliance and innovation. This makes it easy to run transparent reviews and align expectations. Customise metrics to reflect your organisation’s unique priorities.
• Turn Stakeholder Feedback into Supplier Action: Automated surveys capture on-the-ground insights from internal teams, helping you spot issues early, surface improvement opportunities, and ensure supplier performance stays in step with business needs.

Reporting and collaboration ensure that supplier relationships are data-driven, transparent, and aligned with commercial outcomes, ultimately contributing to improved cost control and value assurance.

4: Mitigate Supplier Risk Proactively for Financial Protection

Today's supplier risks are increasingly complex and variable, encompassing cybersecurity threats, ESG concerns, financial instability and geopolitical volatility.

Failure to proactively identify and mitigate these risks can expose your organisation to significant financial losses, non-compliance penalties and reputational damage.

A mature supplier management program embeds continuous proactive risk identification and mitigation into every stage of the supplier lifecycle, safeguarding your organisation's long-term operational capability and financial interests. It allows you to:

• Stay Ahead of Supplier Risk, Not Behind It: Embedded risk registers help you score, track and centralise supplier risk data, so your teams can collaborate effectively and act early to mitigate threats before they escalate.
• Prevent Costly Surprises with Real-Time Alerts: Automated notifications flag upcoming certificate expiries, missed obligations or compliance issues, empowering you to take swift action and avoid financial or reputational fallout.
• Make Confident Decisions with Live Risk Insights: Tap into real-time third-party risk data, like credit ratings, adverse media and company health scores, to monitor supplier stability and take proactive steps to safeguard your operations.

Pillar 5: Control Supplier Spend for Optimised Financial Outflow

When supplier spend data is fragmented across procurement, finance, and contract teams, the lack of overall visibility creates blind spots, duplication, and uncontrolled costs, hindering efforts to optimise financial outflow and maximise ROI.

Gatekeeper provides comprehensive spend management capabilities that enable organisations to gain visibility into their supplier spending, control costs, and optimise their procurement strategies.

• Cut Waste, Not Corners in Your Supplier Base: Quickly uncover supplier overlap and consolidation opportunities to reduce costs, strengthen negotiation leverage, and extract more value from every supplier relationship.
• Bring Contracts and Spend into Sync: Integrate with NetSuite and other ERP systems to reconcile actual spend against contract terms, streamlining payments, tightening financial controls, and ensuring a single source of truth for commercial data.
• See Exactly Where Your Money’s Going: Visual spend dashboards make it easy to spot trends, anomalies and leakage, so you can take decisive action to improve budget adherence and unlock savings across categories.

With Gatekeeper, finance and procurement teams can work collaboratively to optimise supplier value, reduce costs, and drive strategic sourcing decisions that improve the organisation's financial performance.

How Redwood Logistics Elevated Supplier Management with Gatekeeper

Challenge: Disjointed, Manual Supplier Oversight

Before Gatekeeper, Redwood Logistics managed suppliers and contracts manually, with each department operating in silos. This fragmented approach meant critical supplier information, such as spend data and contract terms, was often inaccessible, creating inefficiencies and missed opportunities for negotiation.

Solution: Centralised Supplier Management Through Gatekeeper

Gatekeeper’s Impact:

• Unified Vendor Data: By integrating Gatekeeper with NetSuite, Redwood consolidated supplier information into a single source of truth, enabling company-wide access and collaboration.
• Automated Workflows & Alerts: Custom workflows and real-time alerts streamlined supplier onboarding, contract management, and compliance tracking, minimising supplier risk and manual follow-ups.
• Contract-Linked Spend Insights: The NetSuite integration aligned supplier spend with specific contracts, making it easier to monitor performance and identify cost-saving opportunities.

Results: Strategic Supplier Partnerships and Cost Control

1. Improved Supplier Negotiation: With better visibility into vendor performance and spending patterns, Redwood could renegotiate terms proactively or source alternative suppliers.
2. Optimised Supply Chain: Supplier data centralisation allowed for smarter bulk purchasing and better forecasting, resulting in economies of scale and improved cost control.
3. Reduced Risk and Waste: Enhanced contract oversight reduced the risk of auto-renewals, maverick spend, and compliance lapses.

“The ROI is the visibility of the contracts and the actual spending… we can do a better job negotiating those ahead [of renewals] or going to market and finding better deals.” - Gubio Henrique, Senior Vice President of Sourcing and Purchasing

Gatekeeper enabled Redwood Logistics to transition from reactive oversight to a proactive, strategic supplier management approach. Through real-time data, process automation, and tight NetSuite integration, they turned supplier management into a value driver - not a bottleneck.

Wrap-up

A robust supplier management program is an essential capability for achieving financial stability, managing costs effectively, ensuring compliance, mitigating risks, and building a resilient supply ecosystem.

By focusing on the five pillars - automation, segmentation, performance, risk, and spend - your organisation can develop a supplier management strategy that delivers immediate financial impact and long-term value.

Supplier management software is the key enabler for establishing these pillars. Request a demo today to see how Gatekeeper can transform your process and drive significant improvements in efficiency, cost savings and risk mitigation.