What is Supplier Onboarding?
Supplier onboarding is the process of collecting the documentation and data needed to set up a business as an approved vendor or supplier. The process involves collecting data about the suppliers and collecting credentials to make sure suppliers match up to the capabilities declared originally. It is the process to make sure the supplier has all the paperwork in place to deliver products and services meeting all regulatory compliance and standard of governance laid out by the customers and the company itself.
Below you can find further information on why Supplier Onboarding is important and how our supplier onboarding process can help companies save valuable time and money.
Supplier Onboarding Process
The elements of the supplier onboarding process may vary somewhat depending on the organization, the type of goods or services provided by the supplier, and the strategic importance of the supplier. For strategic suppliers, the onboarding process may involve a level of review that is as quite lengthy and rigorous. However, for non-strategic suppliers, the onboarding process may involve only collecting some basic data and conducting a Dunn and Bradstreet check. However, there is more to getting a new supplier set up and ready to do business with a large organization. A good onboarding process will include other establishing procedures for other common activities that take place in the relationship like purchase orders, invoicing, shipping notices, and receipts. The sections below contain a breakdown of some common parts of the supplier onboarding process and a brief explanation about each part.
Capturing Supplier Data
This involves obtaining profile information like company name, address, the primary point of contact, and other information that will be needed to perform supplier verification checks. This is sometimes called supplier registration.
Providing Policies to SuppliersImportant policies, procedures, and other documents must be provided to suppliers and suppliers should acknowledge that they have read and received them.
Obtaining diversity information from suppliers and categorizing suppliers appropriately can be crucial. Suppliers should also provide relevant and up-to-date certifications where appropriate.
Supplier Verification Checks
Common checks that companies use will include checks to assess financial health, the quality of products, capacity, or the effectiveness of the supplier's manufacturing process. Some companies will also conduct site visits in order to get a first-hand view of a supplier and its facilities.
One of the key checks that is often missed out in the hurry to do business is regulatory compliance. Regulatory compliance comes in many forms and it is either adherence to the FDA/EPA/state/county standards meeting the norms laid out by the customers of the company.
Setting up Payment Information
This involves obtaining the appropriate payment address, payment point of contact, banking information, or other financial information required to make a payment to the supplier once the company receives an invoice.
This involves negotiating the contract with the supplier, agreeing to terms, and obtaining a signed agreement.
E-Signature is the way to go for all contract management these days. It saves valuable time and money.
Acquiring Product Information.
Product information needs to be obtained from suppliers. This can be done by obtaining product data, a supplier catalog, or by obtaining information from "punch out" to another source of data.
Email us at firstname.lastname@example.org to know how we take care of the Supplier Onboarding.