Supplier onboarding is a key phase in this value-creation process, as it ensures that the supplier can deliver their value quickly and efficiently. The process needs to be streamlined for both sides while still capturing all the critical information – pricing, deliverables, due diligence, T&Cs, etc. – that a company and its suppliers must agree on before they can start fulfilling their contract.

Suppliers are central to how a business creates value, whether they supply office space, technology systems, raw materials, data, or anything else. They are selected carefully to ensure that a company gets value for money and that the supplier is a good fit operationally, culturally, and commercially.

So, what can you do to ensure the whole end-to-end onboarding process is quick, streamlined, and efficient?

Here are the 5 steps we recommend to companies looking to up their supplier onboarding game.

1. Review Your Supplier Onboarding Model

The first step is to assess whether your supplier management model is still right for your business as time changes.

In broad terms, there are two approaches to managing vendors.

The centralised model places supplier onboarding and management in the hands of a central procurement function.

Alternatively, some companies prefer a delegated model, where the manager appointing suppliers on their projects is responsible for vendor onboarding and management.

Both models have pros and cons.

A centralised approach ensures that the vendor selection criteria and process is consistent across the business. This ensures that the risks involved with appointing suppliers – anti-bribery, modern slavery, or the ability to deliver to spec. etc. are minimised if not eliminated.

However, this approach can be inflexible, especially in large businesses or those with a wide global footprint. Here, both business units and their suppliers must adapt their projects and processes to match the requirements set by the procurement function.

In contrast, the decentralised approach is very flexible. Still, it can quickly expose companies to significant operational, regulatory, and reputational risks if the manager appointing a supplier does not understand or perform the right due diligence checks and reviews that their company expects them to do.

Many companies are exploring ways, leveraging technology, to take a more hybrid approach that helps them take the best of both approaches while eliminating the cons that both possess.

2. Review your Supplier Management Policy

Your supplier management policy can also be helpful when trying to onboard vendors more quickly.

Policy management focuses on defining the specific vendor management needs of the business, defining what due diligence steps need to be taken, what particular criteria need to be met, whether turnover, years in business, location, size, or level of experience, for example.

Reviewing and updating your vendor management policy can help you understand what alternative types of suppliers you need, compared with, say, 5 years ago, and how best to manage them. For example, numerous small, valuable tech companies might have fallen outside the old policy’s scope but now might need to be considered as suitable based on new criteria.

3. Create a Supplier Catalogue

The pace of modern business means that suppliers can be needed on short notice to address critical business needs quickly. In that situation, the last thing a manager wants to deal with is a complex procurement process that takes weeks and months to negotiate. Equally, procurement teams don’t want to hold back the business, but they do need to ensure that suppliers meet their essential criteria.

Innovative companies address this challenge with supplier catalogues that allow prospective suppliers to pre-register their interest in becoming a supplier. A catalogue allows current and prospective supplier to highlight their areas of expertise, products, services, and pricing models. They can also be pre-screened to ensure they need the supplier management policy.

4. Streamline Your Risk Assessment Process

Risk assessing potential suppliers is a significant reason why onboarding takes so long.  In addition to checking the credentials and veracity of a company, you need to understand any issues they have been exposed to – regulatory, reputational, financial, or operational, for example – that may compromise the service they can provide.

Crucially, you may need to do similar due diligence to your supplier’s own supply chain so that suppliers in the 3rd, 4th, and 5^th levels are also identified and assessed.

Streamlining this process and capturing the results clearly and transparently will help accelerate the onboarding process, as well as help de-risk new engagements.

5. Use Automation

The workload involved in onboarding suppliers is significant, whether capturing a supplier’s company details, checking them, searching for potential suppliers, or managing the vendor sourcing/review/ approval process workflow.

The smart move is to automate this as much as possible, using a flexible SaaS-based platform that is easy to adapt to a business’ standard supplier onboarding model, which can be adapted as times and needs change. A SaaS-based platform makes implementing this type of platform quick and easy and can feature a core database, workflow development tools, management reporting, and data integration APIs. This allows companies to develop the right onboarding model for them.

How Can Telic Digital Help You?

Telic Digital has extensive experience helping companies automate and streamline their critical onboarding systems and processes to help cut the time and costs of supplier management. We understand companies’ challenges and can provide creative and proven solutions to the most complex issues so businesses can implement the supplier onboarding model their company needs.

Learn how Telic Digital can help you master your supplier onboarding.

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