November 16, 2017

What is Supplier Onboarding?

supplier onboarding

What is Supplier Onboarding?

Supplier onboarding is the process of collecting the documentation and data needed to set up a company as an approved vendor or supplier and to enable your organization to efficiently conduct business, purchase goods and services, and make payments to that company. Supplier on-boarding also requires vetting and validation to insure the prospective supplier is compliant with laws, regulations and your corporate standards.

Below you can find further information on why Supplier Onboarding is important and also a high-level example of the typical supplier onboarding process steps.

Why is Supplier Onboarding important?

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.

Furthermore, it’s not only your biggest suppliers that matter. If all your suppliers don’t participate, it’s difficult to increase your efficiency, reduce costs, capture discounts, and get a high ROI.

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,
  • accounts payable
  • 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, can complicate the supplier onboarding. For instance, a merger or simple acquisition can quickly change the demands on the onboarding environment. As companies evolve, they can also 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

Supplier Onboarding Process Example

The diagram illustrates the typical steps for a Supplier Onboarding process. It should be noted that a good onboarding system will tailor the data and information requirements to the supplier based on supplier type, spend amount, category, country, business unit, risk and other factors if required.

What is supplier onboarding
Number of Suppliers Onboarded in 2017

by Costas Xyloyiannis

Chairman & CEO

With HICX since its formation in 2004, Konstantinos has been instrumental in building it into a leading Supply Base Management company. He is responsible for setting the company’s strategic direction as well as overseeing the growth and expansion, strategy, planning, execution and overall performance of the company.
More articles by Costas

or

Explore our solutions

The answer to all of your third party and supplier management problems.

Learn More

Try for yourself

Give our sales team a call +1 (312) 948-0391 (US) or +44 (0) 203 325 4244 (UK)

Live Demo

© Copyright 2017 HICX Solutions. All rights reserved.