Developing relationships with new suppliers can be challenging. It is possible to lose valuable business and sacrifice profit margins without a clear system in place for onboarding and developing these partnerships.
A smooth start to your partnership can be achieved by onboarding your suppliers before you begin working together.
As the supplier relationship progresses through each stage of the onboarding program, a robust supplier onboarding process will actually consist of several separate processes.
The following steps will guide you in developing an onboarding process from the point at which you consider a supplier to the point at which a partner is approved.
Establishing supplier evaluation and approval policies is the first step in developing an onboarding program. You should define the guiding parameters for who you will and will not work with, as well as the approval process that will be followed by your team and the prospective vendors.
By defining clear policies and vendor requirements, you will be able to expedite the process of vetting and approving suppliers and ensure that both you and the supplier are on the same page. It will be more efficient and less likely to cause friction if policies and expectations are clearly defined.
Make sure that you establish a vendor portal for your prospective suppliers to register and apply to work with you if you do not already have one.
It is recommended that the vendor fill out a form on the portal that will enable your team to quickly vet the proposal by obtaining contact information and other information. Your data will be more accurate, and the process of gathering information will be streamlined as a result.
Vendors considered to be strategic suppliers have a greater impact on the business. As a general rule, they account for a larger proportion of the company’s spend compared to other vendors and may also have other strategic benefits to the company.
Due to the significance and value of these vendors to the business, it is prudent to create a separate vendor onboarding process for them. The onboarding program may benefit from the involvement of a cross-functional committee to nurture these relationships.
A culture of communication is the foundation of the most successful onboarding programs.
Be sure to keep communication at the forefront of your onboarding process. To ensure that all parties have access to the best vendor information, your processes should be designed to facilitate the sharing and access of vendor data between departments and stakeholders.
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Vendor evaluation and risk assessment are the first stages of onboarding:
Before proceeding with the approval process, you will want to ensure that all parties understand each other’s objectives. Before finalizing approvals, please clarify the following expectations and requirements:
It is likely that strategic supplier partnerships will require a more deliberate approach to onboarding so that these relationships can be nurtured and developed carefully. A basic checklist is not sufficient for these types of suppliers.
A vendor application portal, enabling suppliers to enter their own information, is the easiest method of gathering accurate and consistent supplier data.
Your form may require additional verification from the supplier, depending on its depth. For each vendor, you should collect the following information:
Make sure you share all necessary data with all stakeholders once you have gathered all the necessary information. In order to make the supplier onboarding and activation process as seamless as possible, it is imperative that accurate information is communicated clearly.
Follow these best practices when developing your onboarding process:
Developing a strong supplier base management program begins with a supplier onboarding process, which is the first step to building those crucial business relationships.
In addition to strengthening your business relationships, a vendor onboarding process will assist your organization in achieving the following: