Most of us in Supply Chain will at some point have to carry out a supplier business review but what separates the great business reviews from the bloodbaths (you know those ones where you and the supplier vow never to work together again!!)?
Supplier Business reviews are typically a routine and systematic process that business undertake with their supplier covering all salient elements of both the supplier relationship and their performance. These happen periodically (often monthly or quarterly).
These meetings are part of Supply Chain 101 and while it might seem obvious what to do it’s important to consider what you are trying to achieve with these reviews. While there is no single generic format for these meetings there is of course some tried and tested best practice.
The key thing to remember is that these sessions are not by their intent set out to be adversarial, they are not there to beat each other up, no matter how much you may feel like it, these sessions key purpose is to share information and improve both the relationship and performance.
Coming up with a suitable agenda can sometimes be tricky. You may not treat all of your suppliers the same – you might choose to treat key suppliers (or those with the most critical issues differently from smaller ones). There can be a multitude of factors that influence
• Periodicity of review
• Attendance at reviews
• Depth of reviews
• Agenda
Ultimately you need to figure out what is appropriate and what works best for you and your supplier. Ensure you have an objective for the review that you can both attain and review. For example – your principle objective might be to share performance data and establish improvement targets. The meeting should serve a purpose and NOT just be a chit-chat.
Perhaps the most crucial thing, more than anything is to get your agenda right. Agenda’s help meetings hugely, they act as a prompt for the meeting lead and provide a route to navigate through the various issues/objectives. It’s never surprises me how a tweak in the running order can change an outcome and change the dynamic of your review. So if your looking to spruce up your supplier reviews with a fresh agenda then here’s our list of must haves that make a supplier development review rock.
1/ Performance review / Look at the metrics – you have targets right? How are you doing against them?
2/ Forecast review – what’s the forecast looking like, what business do you have coming up? How does that stack up against capacity?
3/ Review of existing orderbook
4/ Benchmarking – what’s happening in this supplier’s sector? How are they performing, how’s their product offering, what do you want from them?
5/ Compliance – how is the supplier working with your processes, everything running smoothly? Any supplier onboarding issues that need addressing?
6/ Innovation/Change – what can be done differently to improve things
7/ Actions review – you captured actions at the last meeting right?
8/ Relationship review – how does your supplier see things? Same as you?
So there our input for a rocking agenda – have your own thoughts? Something to contribute? Fire is up on the comments section below.
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.