How to Develop an Efficient Supplier Onboarding Process
Learn why a better supplier onboarding process saves your team time and money.
If you have a long and cumbersome supplier onboarding process, it can bog down your team with unnecessary time and work. Maximizing the efficiency of your supplier onboarding is a strategic decision that will benefit your business in the long term. There is a great need for effective supplier onboarding processes in the procurement field to benefit both supplier and customer.
Still trying to figure out where to begin? Keep reading to learn a few tips on creating a successful supplier onboarding process that will benefit both parties.
Let’s first talk about strategic sourcing. All businesses need goods and services that other businesses supply. That means businesses must do strategic supplier onboarding when selecting and working with their suppliers. Especially among large companies that manage a supply chain with hundreds of suppliers, supplier onboarding processes can become very complicated when they don’t need to be.
In procurement, sourcing randomly isn’t enough. Strategic sourcing allows procurement to make a difference in the business – saving money, protecting from risk, standing for company values, etc. Your team must create a strategy that accounts for the business’s goals and values.
One significant factor that may be overlooked is creating mutually beneficial relationships with your suppliers. Relationships of trust, collaboration, self-service, and clear expectations will pay dividends for your sourcing strategy. When your suppliers trust you, enjoy key benefits from working with you, and achieve their own goals, they will be much more motivated to aid you quickly and efficiently throughout your supplier relationship.
Supplier onboarding is one place to optimize your business processes and create a better supplier experience. Ensure your supplier onboarding process is clear, simple, easy, and collaborative. Otherwise, your suppliers won’t enjoy working with you, and you’ll lose that strategic advantage.
Benefits of Streamlined Supplier Onboarding
An effective supplier onboarding process may be even more essential than you think. If your supplier onboarding checklist or process is clunky, inefficient, or time-consuming, you’ll not only inconvenience your prospective suppliers but also cost your business time and money.
So, what can you do to create a seamless and collaborative onboarding process for your suppliers? Start by taking a look at what you can automate.
How do businesses automate supplier onboarding?
One way to automate your vendor onboarding process is using technologies designed to help your team do just that. It is astounding how many procurement teams leave their supplier data and relationships to email and spreadsheets. If you’re looking to up your game, it’s time to look into a strategic supplier onboarding portal that can help simplify your process.
Benefits of supplier onboarding with a self-serve portal
To maximize onboarding efficiency for your procurement team, seek out vendor portals that are simple and easy to use. Your relationships with new vendors can be either strengthened or weakened from the start. Their impression of your business’s streamlined processes can help you begin a new supplier relationship on the right foot.
Many supplier portals can help you automate vendor data collection, evaluation processes, and supplier relationship management. This can be difficult to manage without automation tools, especially with hundreds of vendors.
Suppliers appreciate it when you think carefully about the process you are asking them to undergo. They’ll see your attention to onboarding best practices, and their desire to continue working with you will increase.
Graphite takes the supplier portal to the next level; suppliers manage a single network profile with all their critical data and due diligence information. Rather than fill out redundant questionnaires, suppliers simply amend their existing profile with any additional information a customer needs and share with a click. Suppliers can also update their information at any time, and those updates are automatically shared with all their connected customers, ensuring supplier data is always up-to-date.
Create an evaluation and approval process
Another aspect you can automate through a portal is supplier evaluation and approval. Your supply chain depends on supplier relationships built through quick and efficient onboarding.
A streamlined evaluation and approval process can help your procurement team stay on track in vendor onboarding. When managed outside of a portal, supplier evaluation can include back-and-forth emails, Excel documents, and poor visibility into where the process stands at any given time. Onboarding software like Graphite Connect automates supplier evaluation and archives documents and communications in a central repository for easy access.
Automating this process can help your team create a successful supplier approval and onboarding process by reducing the time it takes to approve and activate future suppliers.
Vendor onboarding checklist
A critical part of the onboarding process is a vendor onboarding checklist. An onboarding checklist is an easy-to-follow list of all the items that must be completed before a vendor is considered onboarded. This will allow your team to keep track of what steps they need to complete and easily see where they are in the process.
A checklist can also help streamline your onboarding process and stay in line with onboarding best practices. If it seems simple, that’s because it is. But it isn’t a step that you want to skip. Having this checklist will reduce human error and increase the speed of your onboarding process.
Some onboarding software makes this step even simpler with automated workflows. In Graphite, teams can build custom onboarding workflows that ensure each step is completed and share progress with team members and stakeholders.
Strategic Vendor Management
Another important part of supplier onboarding is supplier management. Once you begin working with a new vendor, you don’t want to have a set-it-and-forget-it mentality. You want to ensure that vendor relationships continually grow and shift where needed. You always want your supplier relationships to be fresh, or they may fail when you need them most.
Create a vendor portal for registration and data collection
Your vendor portal can not only help your vendor onboarding process but also aid you in managing vendor relationships down the line. A supplier portal can help you build a central location where all information on each vendor is stored. This makes any data easy to locate, update, and manage as needed throughout your vendor relationship.
Once a vendor is registered in your system, working with them becomes more seamless and mutually beneficial. It’s a bonus if your supplier has access to their profile in your portal and can make necessary updates to their information themselves. That will greatly reduce the time your team must devote to data management.
Another important piece of data collection and management is data security. You always want to prioritize data security to gain your potential suppliers’ trust and protect your own company. Data is currency in today’s world, and keeping your supplier data secure is an essential part of choosing a supplier onboarding process. Graphite validates each supplier’s critical data, like Tax ID and banking info, and re-validates whenever that information is updated. This process eliminates bank fraud and saves procurement teams hundreds of hours each year.
Develop a process for strategic supplier partnerships
When taking on new suppliers, addressing supplier risk, deciding which contracts to renew, and maintaining supplier relationships, your team should have an outlined strategy and process for making those decisions. It is never a good idea to make spur-of-the-moment decisions when working with a supplier.
Instead, take into account your business’s overall goals, as well as your team’s goals. Are you looking for companies that will help you hit your ESG goals? Perhaps you’re facing budget cuts and must decide which suppliers are most essential. These decisions will be made far easier if your team has established goals and your supplier strategy is based on those goals.
Also, when working with suppliers, it is beneficial to view them as partnerships. These business relationships are mutually helpful and, with the proper care, can help both sides succeed. Therefore, communication is key to ensuring that both parties get what they want and need from the business relationship. And if that is not true and is unfixable, then it’s time to terminate a supplier relationship.
Establish a system and culture of communication
Communication is key to knowing what suppliers need from you and ensuring that your suppliers understand what you expect from them. Be sure that all of this is outlined in your supplier contracts and that both parties understand the terms of the agreement correctly.
This will save you a lot of time down the road if you can create supplier contracts from the beginning that benefit the goals of both parties.
However, communication is key even if bumps in the road appear, which they often do. Understanding what went wrong, listening with the intent to help, allowing supplier input, and creating a strong communication culture will be essential to your success.
Allow for collaboration
It is also beneficial to allow for supplier collaboration. Sometimes, procurement teams can get caught up in their own aims and goals. However, suppliers also have goals and ideas. Often solutions can be found that equally benefit both parties– but only if collaboration with strategic suppliers is encouraged and allowed.
Also, suppliers know their specific industry far better than the procurement professional will. They may have solutions, ways to cut costs, etc., that they can share with you if you don’t put your own demands front and center. Don’t always make your suppliers do custom work for you. They have a process of their own for a reason, and if you listen, you may find their way actually makes more sense than what you had in mind.
Build a winning team of suppliers
Think of your suppliers as an extension of your team. When you hired your team members, you likely looked for certain skills, abilities, and personalities that fit well with your team. You should do the same when you look to onboard suppliers.
Choosing suppliers that align with your company’s goals and understand your company’s culture could save your team extensive time spent negotiating and explaining throughout the entire supplier relationship. Choosing suppliers that are a good fit for your business could very well save you time and money on each and every step of the supplier relationship journey.
Graphite Connect is a supplier onboarding service built to streamline supplier onboarding, enhance risk controls, and empower procurement teams to elevate their strategic sourcing.
With supplier-managed profiles, data validation, and automated risk assessment, Graphite reduces onboarding times by 70% and enables teams to focus their efforts on building and managing strategic supplier relationships.
Interested in Learning More?
Meet with a Graphite expert to learn how to revolutionize your supplier onboarding process.Contact us