Supplier Onboarding Evaluation and Delivery
A Managed Supplier OnBoarding Process will Deliver Supply Chain Objectives
Supplier OnBoarding is a process that evaluates capability and capacity to meet the demand of the supplier matrix.
New supplier demand drivers maybe derived from scorecard performance, brand and category expansion, business financial objectives, product supply agility or risk.
All steps in the OnBoarding process must be project managed to ensure potential new partners are evaluated, matched to capability and capacity requirements and understand your business demands.
If there are intermediates involved in the process, agents or trading companies, a systematic evaluation process needs to be performed. All downstream PARTNERS must be evaluated to ensure demand can be achieved.
The following OnBoarding steps are considered mandatory;
Supplier OnBoarding Supplier Pre-Evaluation
- Sign confidiality agreement & Supplier Pre-Evaluation Information / form
- Raw Material / Product Pricing Evaluation (Benchmarking)
- Existing Product Quality Evaluation
- Supplier Risk Assessment
Link to Confidentiality Agreement
Supplier OnBoarding Sourcing Physical Evaluation (Sourcing Team)
- Assess Management Team and Individuals that will manage the account, experience and ability to influence outcomes to achieve required service levels
- Evaluate product development capability, machinery, process and capacity
- Evaluate production management capability, machinery, process and capacity
- Quality assurance and control management and process, raw material, pre-production, work in progress and finished goods
- Review value added services including what innovation the supplier can bring into the business
- Social Compliance Pre-Evaluation
- Sign-off of Business Code of Conduct, Terms and Conditions, Intellectual Property and any other business agreement necessary.
Link to Code of Conduct
Link to Terms and Conditions
Supplier OnBoarding Quality Evaluation (Quality Auditor)
- Evaluates quality assurance and control process, raw material, product, development, pre-production, work in progress and finished goods
- Educates the supplier on the current quality process and business need
- Establishes all corrective action plans CAPS, responsibility and time line for corrective action
Supplier OnBoarding Social Compliance Evaluation (CSR Compliance Auditor)
- Evaluates the supplier and all key downstream raw materials suppliers as necessary to ensure they will pass minimum social compliance CSR level for the business
- Establishes all corrective action needs CAPS, responsibility and time line for corrective action
- Manages with sourcing team all requirements for 3rd party compliance auditing and future corrective action
Supplier OnBoarding Finance Evaluation
- Verify supplier’s business, tax license and other relevant certifications
- Verify bank account for payment is verified as the vendor’s registered account
- Establish Suppliers in ERP system so purchase orders can be raised
Supplier OnBoarding Situational Evaluations
- Suppliers credit evaluation when there is a concern of ownership and liquidity, I recommend Dun & Bradstreet http://www.dnb.com
- MOU, minutes of understanding where there is a heightened requirement for understanding on process, intellectual property, royalties or any other conditions not outlined in the Code of Conduct or Terms and Conditions
- Individual market product compliance and certification
- Sustainability and traceability compliance
- CT-PAT / Anti-Terrorism audit
Link to MOU – Memorandum of Understanding
Link to CT-PAT
The audit / evaluation timeline depends on the business need to adopt a new supplier. It is preferable to conduct supplier OnBoarding audits at the same time to benchmark and compare. Expediting a supplier evaluation is critical to ensure all steps are maintained and ensure there is no impropriety through the process.
Management of corrective action needs CAPS are an important process to educate and bring a supplier up to the expectation. Corrective action management is a key development process towards delivering an effective Quality Management System QMS. It is important that Sourcing Operations manage the critical path process with a continual improvement view rather than qualified or not qualified.
Once a supplier is certified and bought on-board, a gradual production build-up must be viewed as paramount to ensure suppliers are educated in business needs and corrective actions drive the total quality management system need.
The supplier matrix will define category allocation, production build-up and capacity level suitable for the supplier’s capability.
Like to know more, Contact PHIL BAILEY – APPAREL & TEXTILE GLOBAL SOURCING OPERATIONS LEADER
A Global Sourcing, Procurement & Supply Chain Leader with 25+ years proven skill transforming complex Retail, Wholesale, Catalogue and Ecommerce sourcing, supply chains and operations for global Apparel, Textile and Consumer Products businesses that source from low cost production regions and distribute to global markets.