New Supplier Qualification and Onboarding – Think Outside the “Cost/Price” Box

Selecting the right supplier for a component/service is critical to product, quality and operational excellence. The rigor that goes into evaluating and selecting depends upon on the criticality of the component/service to the company, product and operations. Organizations use different criteria for categorizing suppliers. A couple of examples are given below

Supplier or Commodity Categorization

 

 

Supplier Evaluation Criteria

Evaluation criteria and their weighting for selecting suppliers can be dependent upon specific program needs. Often this is a cross-functional process with input from multiple stakeholders.

 

 

 

Based on the inputs supplier capability assessment can be calculated on a normalized basis as shown below.

 

New Supplier Onboarding Process

Once the new supplier is selected the onboarding process ensures that the supplier is able to effectively engage and perform well. Depending on the type of supplier and region the process can be quite extensive requiring orchestration of internal workflows, getting information from the supplier, risk assessment, contracting, and agreements on statements of work. In addition, the supplier needs to be established in various systems so that collaboration and payment processes are properly supported. The overall onboarding process often requires integration with multiple internal and external systems. An example process designed with ZFlow is show below.

 

 

Supplier Master Data

Supplier master data is an important aspect of New Supplier onboarding and effective working relationship with the customer. Generally the main and critical master data for supplier can include the following

  • Business Information
  • Contact Information
  • Banking Information (for payment)
  • Payment Terms
  • Quality and Related Certifications
  • Compliance Information
  • Qualifications
  • Plant specific information (for plant-specific certifications, logistics, supply chain risks, etc.)