What is supplier onboarding?
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.
How to create a supplier onboarding process
A robust supplier onboarding process will actually consist of several separate processes to move the supplier relationship through each stage of the onboarding program.
Below are the main steps you’ll need to take to develop an onboarding process from supplier consideration to approved partner.
1. 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.
2. 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.
3. Create a vendor portal for registration and data collection
If you don’t have one already, set up a vendor portal for prospective suppliers to register and apply to work with you.
The portal should have a form for the vendor to fill out contact information and other details that will help your team quickly vet the proposal. This improves the accuracy of your data and streamlines the info gathering process.
4. 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.
5. 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.
This step will improve efficiency across the board, mitigate risks of costly delays or mistakes, and promote positive relationships with your suppliers.
