“One of the most important questions I had asked Bob dealt with the actual increase in the distribution of business over the Commonwealth’s supply base both before and after the introduction of eVA. In the year prior to eVA’s launch, between 5,000 and 6,000 of the 20,000 registered suppliers received orders. In 2006, 14,371 of the 34,000 suppliers received orders. So far, in FY07, the number is 14,756 (with 4 months remaining in the year). This hard data is further testimony to the effectiveness of Virginia’s methodology, in which true collaboration was a key element of the initiative. As emphasized in Part 4 of my Changing Face of Procurement Seminar Series titled “Winning Strategies for Vendor Engagement,” knowing if your e-procurement strategy is a “threat or a benefit” to your supply base is critical to the success of any initiative.” – Yes, Virginia! There is more to e-procurement than software! (Part 1) and (Part 2), 2007
Onboarding is critical, as is supplier performance measurement. From this standpoint, the recent digital developments – including the use of AI to provide suppliers with a seamless onboarding process, are very impressive.
However, and this is something that came through loud and clear in a 2005 keynote I delivered to 300 supplier-side auto industry executives, onboarding and tracking supplier performance is not the same as effectively engaging and utilizing suppliers. In other words, as important as it is, easy onboarding is not the only critical or final step in the process because suppliers are measuring “buyer performance.” Watch the 2005 video Q&A with suppliers from the auto industry below – specifically the 16:20 to 17:22 mark as an example of how suppliers are measuring YOU!
Business Distribution
What percentage of your supply base gets your business on a regular basis? As a buying organization, if you can’t readily access that information, your onboarding efforts will be undermined.
The ultimate measurement that suppliers use to assess buying organizations come down to a few very basic but important metrics:
How much money will they make working with you, e.g., responding to an RFQ?
What are the buyer-supplier Days Payable Outstanding (DPO) and Days Sales Outstanding (DSO)?
How easy is it to work with this buyer?
Consider the above a “reverse onboarding” process that suppliers use to see if they want to work with you.
What Would Your Suppliers Say About You?
Here is the link to the Supplier Management During a Crisis (eWorld 2022 Special Podcast), which provides actual case studies of buyer-supplier relationships. Which one represents the state of your current relationship with your suppliers’ “post” on-boarding?
Here is the list of the buyer-supplier organizations referenced in the above case studies:
Loblaws
Frito Lay
Walmart
Vlasic Pickles
State of Minnesota
Facebook
Out-Of-Left-Field
Once again, I want to emphasize that a streamlined supplier onboarding process IS very important.
That said, according to an August 2023 Gallup Poll “only 12% of employees” indicate that their company has a good employee onboarding process.
Today’s out-of-left-field question is this: if a company is ineffective at onboarding new hires, can a company still be effective at onboarding new suppliers?
Procurement Insights
Supplier Onboarding: The “True Measurement” of Success
Posted on October 6, 2023
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“One of the most important questions I had asked Bob dealt with the actual increase in the distribution of business over the Commonwealth’s supply base both before and after the introduction of eVA. In the year prior to eVA’s launch, between 5,000 and 6,000 of the 20,000 registered suppliers received orders. In 2006, 14,371 of the 34,000 suppliers received orders. So far, in FY07, the number is 14,756 (with 4 months remaining in the year). This hard data is further testimony to the effectiveness of Virginia’s methodology, in which true collaboration was a key element of the initiative. As emphasized in Part 4 of my Changing Face of Procurement Seminar Series titled “Winning Strategies for Vendor Engagement,” knowing if your e-procurement strategy is a “threat or a benefit” to your supply base is critical to the success of any initiative.” – Yes, Virginia! There is more to e-procurement than software! (Part 1) and (Part 2), 2007
Onboarding is critical, as is supplier performance measurement. From this standpoint, the recent digital developments – including the use of AI to provide suppliers with a seamless onboarding process, are very impressive.
However, and this is something that came through loud and clear in a 2005 keynote I delivered to 300 supplier-side auto industry executives, onboarding and tracking supplier performance is not the same as effectively engaging and utilizing suppliers. In other words, as important as it is, easy onboarding is not the only critical or final step in the process because suppliers are measuring “buyer performance.” Watch the 2005 video Q&A with suppliers from the auto industry below – specifically the 16:20 to 17:22 mark as an example of how suppliers are measuring YOU!
Business Distribution
What percentage of your supply base gets your business on a regular basis? As a buying organization, if you can’t readily access that information, your onboarding efforts will be undermined.
The ultimate measurement that suppliers use to assess buying organizations come down to a few very basic but important metrics:
Consider the above a “reverse onboarding” process that suppliers use to see if they want to work with you.
What Would Your Suppliers Say About You?
Here is the link to the Supplier Management During a Crisis (eWorld 2022 Special Podcast), which provides actual case studies of buyer-supplier relationships. Which one represents the state of your current relationship with your suppliers’ “post” on-boarding?
Here is the list of the buyer-supplier organizations referenced in the above case studies:
Out-Of-Left-Field
Once again, I want to emphasize that a streamlined supplier onboarding process IS very important.
That said, according to an August 2023 Gallup Poll “only 12% of employees” indicate that their company has a good employee onboarding process.
Today’s out-of-left-field question is this: if a company is ineffective at onboarding new hires, can a company still be effective at onboarding new suppliers?
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