The process of collecting data on prospective vendors, completing compliance and risk assessments, and integrating them into a platform or supply chain is collectively known as supplier onboarding. Simply put, it’s about creating smooth and manageable processes to develop strong buyer-vendor relationships — the kind that result in improved outcomes for all parties involved.
Establishing new supplier relationships can be tricky. If you don’t have a clear and established methodology in place to onboard suppliers, you’re risking a damaged relationship from the get-go. Ensuring that these processes are efficient and streamlined before attempting a new onboard helps get the relationship off to the best possible start.
Good business comes from good relationships. Just as you nurture your customers, so should you do the same with wholesale suppliers or any other type of vendor.
A functional onboarding process will form the foundation of a robust supplier-management system and improve these crucial partnerships. The following will also help:
Without robust supplier onboarding, at best you face a downturn in productivity. At worse, you risk harming your relationships due to poor management, training, or nurturing.
Following are five ways to create a well-planned supplier onboarding process.
Develop an evaluation and approval methodology. When establishing your onboarding processes, you’ll first have to develop precise supplier evaluation and approval programs. Carefully assessing a new supplier is crucial to mitigating risk and avoiding fraud. Do this by introducing and standardizing workflows. Ensure that your values and standards match those whom you’re onboarding.
You need to develop sets of questions that answer your concerns, split into categories like environmental output, legal requirements, insurance needs, whom they work with, and how they work with them. Once you’re comfortable with the answers, it makes the whole process from then on far easier.
Ensure consistency across all locations. Many companies, particularly those with international operations, use different, siloed systems, often with inconsistent supplier data. You need to ensure that the onboarding process, from top to bottom, is uniform across all locations.
Utilize technology that offers you a complete overview of your suppliers’ data and the services they provide. This data can be translated into all branches and departments. Make sue this stays as the uniform methodology to ensure a smooth rollout.
The most successful onboarding campaigns are built on a culture of communication, but good communication won’t happen in a vacuum. Your processes should make it simple for different departments, stakeholders and locations to access vendor data, so that everyone acts on the right information. This step will boost efficiency, while mitigating the risk of delays and promoting a positive relationship with the new supplier across the board.
Create a vendor portal. If there isn’t one in existence already, create one for prospective suppliers to register their interest in working with you. A proposal e-mail usually gets lost in a crowded inbox.
It can take several weeks to a few months to gather all relevant information required for an onboarding process. Creating this portal, combined with a management application, speeds up the process for both parties.
The portal should contain all the relevant forms to fill out, as well as contact information and references. This improves the accuracy of the data, reduces backlog, and heightens process visibility.
Assign strategic importance. Suppliers should be evaluated during the onboarding process based on their level of importance for your business operations. This factor should be weighted based on the urgency, cost, and difficulty to onboard.
If a supplier offers an immediate gain, push them further on a list. If another offers something you want, but don’t necessarily need at this present moment, then lower their position on your list.
It would be best to segment your suppliers based on their priority during the onboarding process, for better governance, management and relationship development. That way, you can better assign timelines and resources while still focusing on daily operations. All of this can be integrated within the aforementioned supplier portal, so that everyone involved knows where they stand.
Invest in the right technology. Even the best thought-out processes will never be fully optimized if they’re still being done on paper by humans. Automation and artificial intelligence power up your processes, remove errors, and free up your workforce to focus on high-value tasks such as recruiting new suppliers or improving existing relationships. There’s never been a better time to rethink your office technology, with the pandemic forcing everyone to think differently in the future.
The right procurement solution can head off many of the teething problems that arise with new supplier onboarding. By keeping all your data in the cloud, you can make it accessible and control who uses it, ensuring consistent communication with the relevant parties.
Employ the right communication tools, like VoIP services across all teams and offices, to improve remote communication. That way, everyone’s on track and knows how far along the onboarding process you are.
Whether it’s hiring freelance people in retail onboarding situations, the addition of a new vendor, application process of a potential partner, or simply wanting to know more about the people who want to work with you, you must streamline and standardize your onboarding process.
Remember to assign the right people to manage the process. Automate where you can. Don’t be afraid to adjust and create a plan that helps you through 90% of each onboarding process. (Each supplier will be a little different.) Set clear expectations and invest in the right technology to help you along.
Get these five tips right, and onboarding new suppliers will become a methodology that’s easy to implement, and even easier to follow.
John Allen is director of global SEO with RingCentral, a global UCaaS, VoIP and contact center software provider.
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