Digitising Supplier Onboarding to meet sustainability goals, address compliance and create transparency

Introduction 

It’s not uncommon for procurement to be seen as a function to help streamline processes, reduce costs and identify better sources of supply to improve organisational efficiency. But how about when sustainability becomes a corporate goal? For a leading service and solutions provider within the Northern European region working within the food, facilities management, property services, and retail solutions sector, procurement was identified as a critical function to achieve this goal. 

Challenge

To support the organisation’s sustainability goal, the procurement function set themselves the objectives to: 

• become a leader in supplier onboarding and management;
• vastly improve processes to save time and money across the organisation;
• make the experience easier for suppliers. 

Having previously worked with Market Dojo and already benefiting from monetary and time savings using Sourcing Dojo’s eAuction software, (over £1 million was saved from one eAuction alone), the focus this time was on supplier onboarding to create an efficient, transparent, and compliant supply chain through the initial onboarding of suppliers through to management.

Until this time, the supplier onboarding process had been a manual one, working with Excel spreadsheets and emails. With 1,500 suppliers across the entire organisation, they were aware that this manual process had its flaws. Despite allocating more administration resources, the management to keep up to date, let alone get to a proactive state, was unwieldy. There was no central storage of supplier documentation for the whole of the procurement team. Dates were hard to keep track of for gathering supplier insurance documents and certificates, leading to risk and low visibility on whether suppliers had the correct insurance and levels in place, which would then fall on the organisation regarding business liability.

The client required consistency in how they onboarded their suppliers, including their differing entities across the globe. They needed centralisation of data that could be accessed no matter where the procurement team member was based. 

The lack of centralisation meant differing business units and entities within the organisation were also using different suppliers for the same categories of spend which led to worse procurement results from a lack of leverage, in some cases with the incumbent suppliers playing one business entity off against another. There was also no way to view potential overlap in suppliers and it was not uncommon for suppliers to be onboarded multiple times since the lack of centralisation meant repeating around eight hours of manual processing for no additional benefit. 

Every supplier onboarding questionnaire was the same, regardless of what they were supplying. This was due to the current process not allowing for supplier specific versions because of resource constraints and being able to manage data and set up the necessary workflows. By using the same questionnaire for every supplier it was often overcomplicated, asking for unnecessary information, equating to additional time and effort for both the supplier and the organisation to process. And most importantly, exposing the client to being unable to meet their compliance requirements and therefore potentially unable to mitigate supply chain risk. There was also no easy way to assess and manage the sustainability aspect of their suppliers.

Source: John Schnobrich – Unsplash

The hours required to prepare reports for the management board based on key metrics such as supplier risk, environmental, social and governance, were time consuming and challenging as often the data was not in an easily accessible format. 

To manage the manual supplier onboarding process, the procurement team spent their valuable time on heavy administrative tasks, forfeiting valuable strategic requirements required to support their business objectives. 

To digitise the supplier onboarding process, the organisation’s procurement team consisted of 10 buyers reporting to the supply chain director. A budget of £17,000 was allocated to deliver this project within a 12 month timeframe. The project team also accounted for working with the different entities, which had differing processes and requirements yet required a standard set of reporting. 

Solution

Market Dojo took the client’s supplier onboarding challenges and mapped out how they could digitise the current manual process, standardise it, meet compliance needs, yet maintain agility at a local level to accommodate the different business entities. The entire supplier onboarding process from initial supplier sourcing, to onboarding, to management of suppliers going forward, was factored in.

SIM Dojo, the supplier onboarding tool used, was created to support fast-paced supplier onboarding, creating an efficient process to onboard suppliers within days as opposed to months. Each step of the process was customised to suit the type of supplier the organisation was onboarding to ensure all of the necessary information was secured from the supplier while providing total visibility of their onboarding status. 

This was achieved through: 

• Onboarding and categorising new suppliers through tailored automated workflows with tagging, action tracking, approval loops, version control, and reporting.
• Tailored questionnaires for specific categories were automatically sent to the relevant suppliers to answer only the questions applicable to them, saving the organisation and its suppliers valuable time.
• Both the procurement team and their suppliers kept information up to date due to the automated document expiry notification feature. This mitigated the risk of out-of-date contracts and insurances and helped towards achieving a 95% compliance rating across the whole supply chain.
• Supplier profiles were accessed in one clear, accurate overview to view contracts, activities, objectives, contacts and communications. The entire procurement team had easy, real-time management and monitoring of suppliers. 
• The centralisation of supplier data with a thoroughly audited trail across the organisation was accessed from anywhere, anytime. Legislation such as the Modern Slavery Act became easily adhered to due to the centralisation. 
• Valuable data was easily reported with dashboards providing ‘at a glance views’ to see which suppliers are onboarded, what categories they deliver, and when they deliver, enabling better buying decisions for the procurement team.
• Self-service reporting capabilities were available based on an integration to Microsoft PowerBI which provides real-time data to track key metrics, virtually eliminating the time previously taken to prepare management reports. 
• Multi-lingual functionality to cater to 21 languages to fully engage a global supply chain was available. 

With SIM Dojo being a cloud-based solution, there were benefits gained over an on-premise, self-hosted solution. The organisation didn’t need to take on the hardware, software and maintenance costs, which tend to eat into delivery time and budget. Less resource was required by the client from an IT perspective due to no set-up and maintenance being required. The software was accessible from anywhere, anytime, which became even more of a requirement with multiple entities using SIM Dojo and remote working as a result of the global Covid-19 pandemic. 

As centralisation of supplier data was an essential requirement, there was an additional need to split between the different business entities, based on the country operating in as well as the business unit i.e. property, food and technical. Filtering was created to allow for different data access and reporting levels.   

This provided the procurement team with the ability to work strictly within their own entity but collaborate as a corporate entity when required. A collaboration example is that the different entities could bundle their energy supplier spend to better utilise their spending power and enable contract enhancers like rebates.

The reporting functionality which uses Microsoft Power BI provides improved reporting capabilities that enable better buying decisions for the procurement team. The organisation had an exact view of the suppliers who are onboarded, what categories they deliver, and when they deliver. The procurement team could access overall dashboards as well as individual, personal, dashboards to view at a glance the status of their suppliers. 

Results

With a digitised process enabled through SIM Dojo, a 20% time saving within the procurement team alone was achieved for administration efficiency, on a like-for-like basis, transparency became available throughout the entire process, communication was greatly improved and risk was mitigated within the supply chain. 

Through using SIM Dojo, the organisation managed to consolidate and reduce their suppliers from 1,500, who needed consistent management, down by 40%. This was enabled through better supplier identification of category and sub-category plus the removal of non-compliant suppliers. SIM Dojo allowed them to focus on preferred and approved suppliers, which allowed for greater negotiation. This was recently flagged in the ISO 45001 audit where SIM Dojo was a major contributing factor to the organisation achieving the accreditation. 

Source: Brad Neathery -Unsplash

Within months of the organisation going live with SIM Dojo, compliance was 95% for the whole of the supply chain. The client felt that without SIM Dojo this data would not be available in real-time and would often be assumed. 

The above enabled the organisation to digitise procurement to provide themselves and their suppliers with the best experience and service, support business growth, and maintain a competitive advantage in the marketplace, without the need for a large budget. And all within the set 12 month timeframe. 

Conclusion 

The outcomes of the project would not have been achieved without empowering the procurement team to focus on their strategic requirements rather than more administrative tasks, such as collecting and chasing supplier data. And with all data centralised, real-time access meant that the procurement team can access the most up-to-date data, with a full audit trail.  

With a digitised process built off the back of modern technology, the organisation is well positioned to continue to support their business growth and best work with their suppliers to deliver great service to its customers. 

This project has resulted in the desired supply chain transparency, compliance has been vastly improved and the organisation is now in a prime position to better manage their sustainability goals.