What is supplier onboarding?
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If you work in Procurement the chances are that at some stage you’ll need to carry out some form of supplier onboarding process.
Supplier Onboarding refers to integrating your supplier(s) into processes and systems in order that they can interface with your business. Often this is in the form of your supplier utilizing a form of technology/software in order that they can process transactions and information.
Supplier Onboarding can be a notoriously challenging process and success is often tied with 3 key aspects
1/ Burning reason to utilize the system (if they don’t need to why would they?)
2/ Ease of use
2/ Supplier willingness
There is frequent discussion of whether implementations should be tailored to suppliers i.e. a one size doesn’t necessarily fit all scenario. While this can be the case it can often be counterproductive to have tailored onboarding processes relating to each supplier.
Many businesses find success in having 1 or 2 methods (often depending on supplier size and criticality).
At the heart of all of this is that you need to be left with a supplier that’s equipped to easily do business with you, whilst you have a suite of appropriate key performance metrics that you can use to analyze supplier effectiveness.
Here is our thoughts on the top 10 supplier onboarding enablers.
1/ Work with the supplier – seems obvious but don’t just leave them to get on with it. Work with them to understand any issues and ensure that you track and close down issues.
2/ Prioritise – you may have 100’s of suppliers to onboard – if you’re integrating them into a software system, prioritize how you’ll go about it (easy suppliers / major vendors first for example) – key thing is to have an implementation plan.
3/ Understand the technology that’s used and how it interfaces with your supplier – make sure you understand the nitty gritty – don’t just assume your software vendor will do the hard work. Make sure you understand the fundamentals of what your supply chain software does and how your supplier is affected.
4/ Work out which processes you will implement first
5/ Train, train and train again – repeat these words 1000 times. I will never underestimate the importance of training my supplier in how to do business with me. You’ll avoid so many headaches.
6/ Easy wins every time – following the above, make sure processes and systems are as easy as you can make them. Make doing business with you as easy and simple as possible.
7/ Look forward – technology rarely stands still – have a well-understood systems roadmap that takes you in the direction you want to go in.
8/ Evaluate risks and mitigate where possible.
9/ Have clear roles and responsibilities for your team as part of the supplier onboarding process.
10/ Provide adequate support to your suppliers when they need it. – encourage your suppliers to get in touch when they need to.
Supplier onboarding needn’t be difficult. If you have a well thought out process that is customizable where it needs to be. Remember that not all supplier relationships are the same. Familiarize yourself with how they operate and aim to get the best you can from your process.
Have some supplier onboarding best practice you’d like to share? Please use the comments section below – we’d love to hear it.