Supplier onboarding is the backbone of effective supply base management programs, yet corporations often find themselves in reactive positions, unable to efficiently and proactively capitalize on actionable supplier information. A successful supplier information management program starts with the right supplier onboarding process.
By establishing best-in-class supplier onboarding processes, organizations can avoid many of the concerns that happen downstream or happen as a result of poor supplier governance during a supplier lifecycle. Since supplier onboarding can be a highly transactional process, it is therefore vital to capture all supplier requirements up front to effectively operate downstream systems and drive other strategic supplier processes such as strategic sourcing, procurement, risk management, supplier performance, spend analytics, and compliance with global and local requirements.
But too often an organization’s own success and growth, combined with the expansion of global operations, global supply bases, product lines, and ERP systems, and complicate the supplier onboarding. For instance, a merger or simple acquisition can quickly change the demands on the onboarding environment. Yet, as companies evolve, they can be reluctant to automate what soon become ineffective processes. Such organizations waste resources on manual efforts to account for ever-changing workflows, information needs, and verifications. Better understanding the current inefficiencies, and roadblocks, of the supplier onboarding processes can provide that baseline for improving supplier relationships and establishing that “value” for all stakeholders involved in wider supplier related processes downstream.
HICX Supplier Onboarding allows you to collect, manage, and ensure the accuracy of core supplier information:
- Reduce internal overhead by automating supplier onboarding
- Deploy with complete flexibility enterprise-wide – globally
- Ensure collection of all needed content
- Control supplier-initiated changes – automate reviews
- Ensure complete audit controls and field-level security
- Enable “manage by exception”
- Identify, capture, and track additional payment discounts
Stale and Inactionable Data
A corporation’s own success and growth, combined with the expansion of global operations, global supply bases, product lines, and ERP systems, complicate supplier onboarding. A merger or simple acquisition can quickly change the demands on the onboarding environment. Without appropriate software solutions in place, it is a difficult and time-consuming task to harmonize processes and controls across an entire organization – whether by corporate mandate, regional guidelines, or business-unit-specified needs.
Supplier information that is not up to date can hurt your business due to:
- Increased internal costs of managing complete supplier profiles
- Incorrect payment information or inability to capitalize on pre-negotiated discounts
- Increased risk exposure
- Poor supplier compliance
While information is dynamic, most supplier management systems are not. As cumbersome as it is to maintain an accurate and timely onboarding packet, it is even more difficult to deploy it across an organization.
The information you need to manage suppliers resides with many stakeholders. Adding to the complexity of onboarding is defining, collecting, dispersing, and approving the specific dimensions of an acceptable supplier: financial profiles, small or diverse certifications, commodity-specific qualifications, government/corporate compliance requirements.
Let’s not forget that not all suppliers are the same. Some are technologically savvy, while others may not have consistent access to the Internet – notably SE Asian and other low-cost country suppliers. Whether a supplier can self-service information or a supplier profile requires internal management, a supplier onboarding system enforces consistency and completeness by ensuring the same processes and standards are applied.
When it comes to onboarding suppliers, efficiency matters. Yet, as companies evolve, they can be reluctant to automate what soon become ineffective processes. Such organizations waste resources on manual efforts to account for ever-changing workflows, information needs, and verifications.
What, ideally, should trigger the need for action? It should be an event that activates the necessary resources as opposed to reliance on resources dedicated to constant oversight of all information exchanges. The goal is “management by exception.” However, few companies have implemented intelligent supplier management systems tied to their specific policies and unique environment.
You should be concerned about:
- The time to onboard a supplier – or update supplier information
- Internal costs and duplication of effort required to create a complete supplier profile
- Your organization’s ability to segment and manage information collection dependent upon supplier-type and use
- Supplier off-boarding controls
ERP systems are never created alike. The information collected on any given supplier, and the use of the information collected, is probably not the same across ERP systems. Many companies experience difficulty managing and syndicating supplier information within these information silos. These problems are evident even in organizations with a single ERP instance as the content necessary for managing suppliers goes far beyond what ERP systems were traditionally designed to handle. The organization ends up with disparate and disconnected systems to handle all non-ERP supplier data.
Supplier activation requires involvement by many, but a single missing element (e.g. an NDA, tax or VAT information; data privacy or security assessment) can slow or even stop the process. Because supply chains cannot be jeopardized over onboarding delays, or bottlenecks, companies often end up using manual efforts to oversee the onboarding process, or find ways to circumvent the process altogether.
All too often, front-line employees are also part-time “buyers.” As a result, the sourcing team can find itself discovering a new supplier only after the fact.
Your entire procurement organization should be concerned with:
- Duplicate supplier records
- Buyers/requesters adding suppliers without vetting by management or sourcing
- Compliance risks associated with onboarding suppliers
Decision makers need to move and adapt. Yet, because local decisions, rush orders, etc., add to the difficulty in getting in front of a supplier problem, processes and guidelines are frequently sacrificed over flexibility. In addition to losing control over requisitions, these decisions can expose the company to other problems, such as not enforcing proper segmentation of duties, or ineffective due diligence and risk management measures.
HICX helps organizations confront these issues head on. Our Supplier Onboarding solution enables you to:
- Automate supplier onboarding to collect information as needed from suppliers, from internal stakeholders, or from third-party data providers
- Deploy with complete flexibility, whether based on languages, regions, or business units
- Ensure all needed content is collected: core supplier attributes, financial and risk profiles, NDAs, contracts, compliance surveys, small/diverse profiles
- Take control of supplier changes: when critical elements such as Tax/VAT and bank account info change, automatic notifications trigger proper review and other actions
- Ensure complete audit controls and field-level security to adhere to corporate security guidelines
- “Manage by exception” versus attempting to manage all suppliers individually, or by reactively managing issues
- Bring the equivalent of AR/AP “straight through processing” to supplier management as frequently as possible
- Syndicate supplier information to necessary downstream and upstream systems
- Identify, capture, and track potential additional payment discounts, credits, rebates, etc.
Featured Case Study
A large global pharmaceutical manufacturer, without automation and consistent supplier add/change processes, struggled with operational inefficiencies, lack of visibility into supplier risk, and poor company image. With HICX Solutions they were able automate their supplier onboarding and supplier add/change process, open the requesting to the whole business, assess supplier risk upfront, and ensure compliance requirements were met. After only 4 weeks, they were able to reduce duplicates, shorten the onboarding time by 80%, and recover over $200,000 in hard dollar savings.
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