Nurturing your supplier and vendor relationships is just as important as supporting your client relationships. Like when building a house, with a structured and efficient supplier onboarding process, the foundations are laid from the start to build a strong supplier base which paves the way for successful partnerships with your suppliers.
However, onboarding new suppliers into your supply chain can involve many moving parts – collecting data on prospective suppliers, completing risk and compliance assessments, integrating suppliers into your supply chain to adhere to your company’s system and business processes, and all with clear communication along the way.
What does successful supplier onboarding look like?
We launched SIM Dojo, our supplier onboarding solution in September 2015. The original project and solution build was run in partnership with one of our customers, phs. The phs Group is the leading hygiene services provider in the UK, Spain and Ireland. With over 120,000 customers over 300,000 locations, they support everything from restaurants to offices, hospitals, and schools, meeting the needs of up to 100 million people. They have one of the biggest distribution networks in the UK and therefore suppliers are important to their success.
Working in partnership with the phs team brought a wealth of experience, and their ideas helped shape our solution, SIM Dojo.
Six years later, here are some of the things that crop up time and time again with our customers in order to succeed in creating an efficient and successful supplier onboarding process.
1. It’s not a one size fits all process
As part of the supplier onboarding process, it’s highly likely you will need to collect different information for different types of suppliers.
There will be times where you need the same information from all suppliers, bank details spring to mind. There will be information that is industry specific, for example, your IT supplier is likely to struggle to answer a question about Safety Schemes in Procurement (SSIP). Equally, you might get blank looks if you ask your Building Contractor about their approach to Penetration Testing. There is also the potential that different question sets are required for different sizes of supplier, for example, the UK law requires companies with a turnover above £36 million to publish a statement on how they tackle Modern Slavery. Smaller companies may not be able to provide the same level of detail.
Therefore, the supplier onboarding process needs to adapt and change. This is where tailored questionnaires assist in addressing the specific categories, and with automation built in to decide which information is needed upfront.
2. Is the onboarding path clearly defined?
In some larger organisations, or those with strict compliance requirements, you may have many different steps in your onboarding process. You may also need different steps depending on the type of supplier being onboarded.
To create a clear and consistent onboarding process, you will need to map out the steps for each supplier type. All of these steps help create a standardised and automated process to mitigate risk and potential fraud. Once the path is clearly defined, each and every supplier onboarded can be asked only the information relevant to them.
This again leads to time savings every time you onboard a supplier in the future. Clear communication during this path with status change updates is recommended as the process moves forward.
3. More information…more responsibilities
While we would definitely not advocate a state of blissful ignorance, you need to consider what having up to date information about your suppliers might mean.
If you ask suppliers to prove they have appropriate insurance when you onboard them – but never check again – you hope they have all diligently kept their insurance up to date. Our customers manage these types of tasks in a proactive way by utilising real-time data of when supplier’s insurances are due to expire and automatically sending prompts to the supplier for them to update their insurance details.
4. Who is going to be responsible?
Who is actually responsible for getting a supplier onboarded?
For a company in one geographic location, it may make sense to have a single person with overall responsibility; or you may wish to divide the ownership according to the type of supplier. For companies with a presence in several countries, you probably want the responsibility to be with people in that region. In large organisations, you will probably need to divide responsibility according to both these criteria, and perhaps others as well.
Onboarding may require input from other experts within the organisation (IT, Health and Safety, Finance, for example). To make sure the process is on track, it is a good idea to know who is responsible for each of these steps and to have a way of checking how long they are taking. Centralised data with filtering can make it clear where and with who the responsibility lies.
5. Things won’t always go according to plan
While it makes sense to have a robust onboarding process, there are times when things won’t go as expected. It is important to have processes in place to deal with these effectively.
6. How else can you use the data?
Information collected during onboarding can be used in a myriad of different ways.
Some examples used by our customers include:
Supplier onboarding, in a nutshell, can be improved with streamlined processes with automation and clear communication, to create those strong buyer-supplier relationships which in turn leads to business success for all parties involved.
After 6 years and well over 10,000 suppliers on-boarded across more than 100 countries, our customers have revolutionized their supplier onboarding processes. I have really only scratched the surface in this article, but I do look forward to sharing more in the years to come. Look out for my ‘12 tips’ article in another 6 years.