How to Optimize Your Supplier Onboarding Process

The speed of business is increasing every day. Too often, however, supplier onboarding becomes a bottleneck to getting business done. By focusing on three basic areas, you can easily improve your supplier onboarding processes and also increase the performance of your procurement team.

How is Your Current Onboarding Process Performing?

Onboarding a new supplier can be time-consuming for everyone. For the supplier, it means filling out multiple questionnaires that regularly ask the same questions they’ve already answered.

For you and other internal stakeholders, it means managing numerous documents and frequently inconsistent supplier data, often living in siloed systems. This approach seriously limits cross-team visibility into your supply chain and onboarding activities. How do you optimize your vendor onboarding process to work more efficiently for both you and your new suppliers?

If you focus on improving these three areas, you can significantly streamline and accelerate your entire onboarding process and enhance your supplier relationships:

1. Create a Standardized Supplier Onboarding Process

Make it easier for new suppliers to work with you by creating standard supplier onboarding best practices. If possible, have a dedicated team for onboarding and supplier relationship management. This will help you improve operational efficiency and better manage supplier risk in your supply chain. 

Improve visibility with a central supplier management platform

To further standardize vendor onboarding, you can use a central supplier management platform to track communications with existing and potential suppliers, record and validate supplier data, and securely share relevant supplier information with other company systems. Create an onboarding timeline that allows for due diligence while ensuring all tasks are completed in a timely manner.

2. Manage Risk in Supplier Onboarding

Vetting a new supplier is a top concern when mitigating risk. It’s important to make sure your supplier information is recorded properly and that any changes to a supplier’s financial information are not only tracked but also verified.

Risk management is all about preventative measures. Even after your supplier information is verified and recorded, ensure your teams regularly perform OFAC/sanctions checks to avoid supplier risk and ensure suppliers continue to meet your standards. Prepare a risk remediation plan in advance so your team knows how to respond if your data security or financial data is compromised.

Automate risk assessment processes

These risk management procedures can be tedious if performed manually, but you can automate your evaluation processes to save time and reduce human error. Ensure that your system automatically validates key commercial data like TIN, banking, OFAC, and W-9 forms to ensure you’re working with the most current, high-quality, and secure information. Changes in supplier banking information should require an online approval process that includes two-factor authentication and secondary stakeholder approvals.

3. Leverage Technology in Supplier Onboarding

Especially post-pandemic, as businesses strive for efficiency, they’re shifting away from time-consuming manual methods and embracing automation. By implementing a centralized digital platform, your procurement and supply chain leaders can benefit from automating supplier onboarding processes so your employees can focus on tasks that bring value to the business.

But it doesn’t stop there! Technology can also play a crucial role in supplier relationship management, allowing your business to strengthen partnerships and mutually beneficial collaborations.

Enhance Speed and Efficiency in Supplier Onboarding

As your procurement team focuses on improving these three aspects—standardized supplier onboarding workflows, built-in risk management, and smart technology—your supplier onboarding and business processes will be faster, easier, and safer than ever before.