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7 Steps to Easy Supplier Onboarding

As a supply chain manager, you can build and deploy the best supplier collaboration system available, but if your vendors are not onboard, it's about as useful as an empty warehouse. The success of your collaboration project is directly tied to supplier willingness to use the system.

7 Steps to Easy Supplier Onboarding

Any time you ask your vendors or partners to change their processes, there’s the distinct possibility of resistance or uncertainty. There are seven simple steps to make the supplier onboarding process pain-free, increasing not only the number of suppliers who participate but also the overall effectiveness of your collaboration system.

1. Be proactive. Supplier onboarding is the most critical process for any collaboration implementation, and organizations should address it proactively rather than reactively. Rather than waiting for problems or resistance to arise, make the case preemptively. Meet with key stakeholders ahead of the project roll out to explain the return on investment (ROI) the project will deliver – not just for your company, but also for your suppliers. They may be under the impression that the benefit is all on the buyer side, but you need to demonstrate how and why that’s not the case. Indeed, the supplier side experiences benefits via on-time payments, visibility into upcoming demand, shorter cycle times and reduced manual labor. Prepare to make the process as seamless as possible from the beginning so that suppliers have no cause to push back.

2. Prioritize suppliers to onboard. Based on the 80/20 rule, 20 percent of your suppliers will typically account for 80 percent of your materials and supply spending. By focusing on that high-volume 20 percent first, you will get more of your spend into the system and under control while only onboarding a smaller number of suppliers. Then, once your top vendors are onboard, expand your focus to the next tier and the tier after that.

3. Forecast how your suppliers will connect. Another way to prioritize suppliers is by their connection preference. Suppliers can be primarily divided between B2B suppliers who might connect via electronic data interchange (EDI) or file transfer protocol (FTP)—high volume and large suppliers typically fall into this category)—and online suppliers who use the web portal.

For B2B suppliers, determine if the suppliers already use a defined EDI or FTP  format to send and receive data; these suppliers would easily buy into the system that uses a format with which they are already familiar, instead of having to develop a new format specific to your need.

For online suppliers, with new browser versions continuously being released, compatibility could become a stressful area if the collaboration platform does not support the browsers your suppliers are using. To avoid this issue, analyze all the browser versions used by your suppliers and prioritize the onboarding of suppliers that use supported browsers. Either help the remaining suppliers change browsers, or work with the collaboration platform vendor to add support for additional browsers. Keep in mind, though, that changing browsers is a lot easier and cost effective than developing support for a new browser.

4. Make registering individual suppliers and users as simple as possible. Here’s another step that applies that 80/20 rule: Automatically onboarding the 80 percent of your suppliers who have no problems will enable your core team to focus on the 20 percent that run into issues.

Allow your system admins to send supplier email invitations with link, username and password; this will enable most of your suppliers to access the platform easily. Some users, however, will experience problems with any automated process, such as miscopying a password or having the email blocked by spam filters. Have a core team standing by to resolve any issues (at least during initial phases of product implementation) so that even your users who experience problems end up with a positive impression. 

Supplies should also be able to submit various required documents and certificates such as NAFTA, non-disclosure agreements, or minority/diversity certificates online so the documents can be tracked efficiently, shared as needed and updated when expired. Allow for supplier admins to manage their platform space by adding and managing other users along with user roles/permissions, and by defining a set of preferences/settings such as what kind of default views or dashboards are available.

5. Plan for future growth. A merger or acquisition from your organization can increase both the number and type of suppliers that need to be onboarded. If your organization is currently in an expansion phase, then plan for this increase by building as many connectivity and management options into your collaboration platform as feasible so that you can scale as needed. You may think all your suppliers can connect via a web browser right now, but if your company grows significantly, you may be working with larger suppliers who prefer to share EDI data via FTP in the very near future. It’s better to scope that possibility at the beginning of your growth stage, even if you don’t implement the functionality right away, rather than being caught unprepared.

6. Prioritize processes to implement. For example, if most of your and your vendors’ time is spent handling invoicing, start with accounts payable automation. Because you are focusing on the key to your vendor-supplier relationship, suppliers are more likely to try onboarding. Once the suppliers buy into your new system and experience an increase in efficiency or a decrease in manual labor, depending upon the need, you can plan to roll out additional processes such as purchase order collaboration or Ship Collaboration. After witnessing this initial success, suppliers will be more willing to get onboard.

7. Provide supplier user training. Training helps to inform the initial perception of the platform and can ensure a positive experience. If your organization does not have the skill sets or logistics to provide training, use the platform or other training vendors to develop and run the training plan. Some product vendors include some level of training when you buy the product. Work with them to effectively utilize that product training by targeting and customizing to your needs. If it will be a live training session, the session schedule needs to be planned a few weeks in advance so that the trainers can develop the content to suit the supplier audience. If your organization has the capability to conduct all future trainings, these initial trainings by the platform vendor can be used as, “Train the Trainer” sessions.

Although suppliers may be initially reluctant to try your new approach, with these seven simple, proactive steps you can dissolve that resistance by showing suppliers that the investment on their part is minimal, while the return for both of your organizations is undeniable. And the more suppliers that sign on, the more successful your collaboration will be.

Source: TAKE Supply Chain

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