Three Common Supplier Onboarding Challenges & How to Solve Them

by | Feb 10, 2021 | Compliance, Experts, Retailers, Solutions

To satisfy the needs of today’s consumers, buying organizations need to continuously add new products to their assortment. And they need suppliers to fulfill these products as fast as possible.

But getting new suppliers ready to fulfill your orders isn’t as easy as it sounds. Here are the three most common supplier onboarding pitfalls…and how to overcome them.

What is supplier onboarding?

Supplier onboarding goes beyond setting up suppliers and their items. Suppliers have to understand your expectations, and how to succeed for you and your customers. This includes understanding your expectations for exchanging electronic data about items, inventory, orders, shipments, invoices and more. A consistent and rigorous supplier onboarding methodology allows you to standardize business processes and data exchanges across your supplier community.

The three challenges of supplier onboarding


1. The process is slow

Buying organizations need to connect to new suppliers within hours or days. Yet, the onboarding process often takes up to six months for a typical supplier. These delays result in missed sales opportunities.

2. Trading partners often push back

Suppliers can often be resistant to electronic trading requirements. In our experience, up to 70 percent of trading partners push back on business requirements, ask for clarification, or delay the onboarding process in some way.

3. It’s difficult to trial new trading partners

Many organizations want to test new supplier relationships while they determine how their product performs. But onboarding a new supplier is time- and resource-intensive. This makes it difficult to quickly determine if the supplier should be a long-term partner.

Manual supplier onboarding causes long-term inefficiencies

As a result of these challenges, it’s common for buying organizations to take shortcuts. To “save time,” they issue orders via email, phone or other manual methods. In the long run, these shortcuts lead to costly disruptions, including:

  • Lack of order visibility
  • Receiving inefficiencies and bottlenecks
  • Poor customer experience due to inconsistent or inaccurate product information
  • Invoicing headaches
  • Difficulty managing supplier performance

Most importantly, using a manual process with a supplier sets the incorrect expectation of how to conduct business with you for the long term. When you work with tens or even hundreds of suppliers, these manual methods become impossible to manage and limit your ability to scale.

SPS can help solve supplier onboarding challenges

SPS Commerce has a proven supplier onboarding methodology to onboard suppliers fast. With SPS Community, you can:

  • Achieve compliance on your business requirements 95 percent faster.
  • Enable suppliers to receive electronic orders via a standardized process within 48 hours.
  • Trial new trading partner relationships and handle spot buys with less effort.
  • Reduce supplier pushback on your business requirements.
  • Automate 98 percent of your order volume, maximizing the value of electronic trading across your business.

Ready to streamline your supplier onboarding? Get more details on how SPS Commerce can help or download our free onboarding guide.

 

Warren Knapp
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Three common supplier onboarding challenges & how to solve them

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