Now is the time to get closer to your suppliers and understand their potential impact on your organisation.
The need for procurement to check and double-check the financial stability of suppliers, and to meet regulatory compliance obligations, is now paramount to safeguard the continuity of business operations. But this will be an impossible task for procurement teams to attempt without better, timely access to supplier information.
Knowing as much about your suppliers as possible will not only minimise the risk of supply chain disruptions but will also lower the cost of managing suppliers, which can be huge for procurement organizations. For the majority of procurement teams looking to find innovative new ways to improve the bottom line, any additional costs are increasingly difficult to justify.
The cost and risk of selecting poorly vetted suppliers can be greatly minimised by improving your onboarding process. Unfortunately, many procurement organisations neglect to focus on this important initial stage in the supplier lifecycle. Why? It comes down to relying on traditional approaches to engaging suppliers, including an over-reliance on manual tools to manage a plethora of supplier information and documentation such as financial statements, product offerings, certifications and external credit scores.
The benefits of using modern procurement digital technologies to onboard and manage suppliers include:
Acknowledge that your suppliers are a great source of knowledge and expertise, which can help you create greater value for your company. Effective supplier onboarding will transform your procurement organisation.
Here are a few tips for you to consider:
If you’re relying on manual processes, and/or supplier information is out of date, then you know there are areas for improvement.
Assess the performance of your current suppliers. If you have concerns, trace the root cause, such as a supplier not providing an updated certification.
Use analytics to assess the performance of not only your suppliers but your team in managing suppliers.
Enable your suppliers to self-classify products and services to your defined spend analytics taxonomy or chart of accounts when they come onboard.
Reduce the cost of onboarding suppliers by establishing a single supplier selection process.
Embed supplier credit scores and other key business information into your pre-on-boarding process so you can efficiently weed out risky suppliers from your supply chain.