Vendor Onboarding

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The right system allows you to efficiently conduct business, purchase goods and services. Gathering the information and requirements you need at the start of your business relationship will have a positive impact on future processes such as: sourcing, procurement, managing risk and evaluating supplier performance.

Navigating new supplier relationships can be complex. Without a clear system in place to onboard and develop those partnerships, you risk losing valuable business and sacrificing profit margins. Onboarding your suppliers before you start working together helps both parties set off on the right foot.

Supplier onboarding is the process of collecting prospective vendor information, assessing vendor compliance and risks, and integrating them to your platform and supply chain. Put simply, supplier onboarding is about creating streamlined processes to build stronger buyer-vendor relationships that result in improved business outcomes for both parties.


Create an evaluation and approval process

When building your onboarding program, you’ll first need to establish supplier evaluation and approval policies. In other words, determine the guiding parameters for who you will and will not work with, and figure out the steps your team and the prospective vendors must take to move through the approval process.

Establish requirements and expectations

In a similar vein, you’ll next have to outline your business requirements and expectations for the working relationship. Creating clear-cut policies and vendor requirements will not only help your business managers and other stakeholders quickly vet and approve appropriate suppliers, but they will ensure both you and the supplier understand what is expected. Clear policies and expectations will increase efficiency and reduce confusion and potential friction.

Develop a process for strategic supplier partnerships

Strategic suppliers are those vendors who have a more significant impact on the business. Typically they represent a larger proportion of spend compared to other vendors and may have other strategic value for the business. Because of their significant impact and value to the business, it makes sense to create a separate onboarding process for these vendors. A cross-functional committee may want to weigh in and help nurture those partnerships throughout the onboarding program.

Establish a system and culture of communication

Finally, the most successful onboarding programs are built on a culture of communication. But good communication doesn’t happen in a vacuum. As you develop your onboarding processes, keep communication front of mind. Your processes should make it easy for different departments and stakeholders to share and access vendor data so that all parties are acting on the best information.

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