Let’s Cut to the Chase: The Importance of Supplier Onboarding

Charlotte Sutton
Charlotte Sutton,
Does your organisation find itself today with supplier records that are duplicated across multiple systems, incomplete, and out of date? 
I guess many of those suppliers just ‘showed up’ when someone purchased something from them and were not properly qualified to determine the relative value they deliver, nor the risk they entail?

Unfortunately, when supplier records are poor, supplier communications are almost always poor as well. This puts your organisation at risk in some very crucial ways:
  • Insufficient supplier coverage in important categories
  • High potential for operational disruption and indirect liability from unqualified suppliers

It also causes the organisation’s cost base to be higher than necessary:
  • High cost of supplier information maintenance and miscommunications across multiple parts of the organisation
  • Reduced Procurement capacity for competitive sourcing due to the time needed for basic supplier management
  • Suppliers unwilling to offer their best prices because it’s hard to do business with the organisation
  • Low supplier (and therefore price) compliance in day-to-day purchasing due to lack of visibility

In order to move toward improved Spend Control, you almost always need to start by improving the quality of supplier records:
  1. How many active suppliers do you have (i.e. those with orders in last 12 - 18 months)?
  2. Where are those supplier records held?
  3. How many other suppliers are in your broader market universe (i.e. those suppliers that are invited or request to be invited to bid for business)?
  4. Where are those supplier records held?
  5. Aside from addresses and contact details, what other information is kept regarding suppliers (e.g. ISO, Insurances, classifications, catalogues etc)?
  6. How are changes to that information communicated?
  7. Who updates the records?
  8. Do you have a concept of an ‘Approved’ list of suppliers?
  9. What criteria do you use?
  10. How do you handle inbound requests from new suppliers?

The PROACTIS Supplier On-Boarding Service uses a proven best practice process to help organisations address this foundational element of Spend Control.

Click here to download the data sheet.