Five Ways to Speed Supplier Onboarding in an Uncertain World

Most of us still clearly remember March of 2021, when the Ever Given, one of the world’s largest container ships, ran aground while transiting the Suez Canal. The accident, caused at least in part by high winds and poor visibility, immediately closed one of the world’s busiest and most important shipping routes. For six long days, the world watched, fascinated, as multiple efforts to refloat the ship failed. Shipping traffic backed up on both ends of the Canal, while many companies chose to reroute cargo around the horn of Africa. When the Ever Given was finally refloated, it made headlines worldwide.

Coming on the heels of significant supply chain disruptions that had begun only a year earlier, the grounding of the Ever Given captured global attention, underscoring the potential for unforeseen events to create big challenges for global supply lines. It was also a stark lesson in the interconnectedness of the global economy. We quickly learned that disruption to shipping routes doesn’t just impact the goods moving through those routes at that moment. Energy prices can be impacted, creating a cascade of pricing impacts through a huge range of goods and materials. Port operations thousands of miles from the scene can get out of sync, as narrowly coordinated schedules must be revised on the fly. Quickly, manufacturers far down the value chain can find themselves looking at empty loading docks or facing serious sticker shock on goods and materials. 

The Ever Given may be fading into memory, but as of this writing, traffic through the Suez Canal has been sharply impacted again. The issues are not with the canal itself this time; rather, recent attacks on international shipping through the Red Sea have caused a long list of global shipping companies to pause shipping in the area. At the time of writing, it’s not clear whether the disruption will be brief and contained or whether it will create significant long-term impacts. Once again, shipping companies face a dilemma: pause their ships and wait for the coast to clear, or make the expensive decision to reroute, adding thousands of nautical miles and weeks of time to the journey. If the latter option is chosen, ships may need to refuel and resupply, adding logistical complexity. Meanwhile, insurance on ships, crews and freight may take a jump, likely impacting freight rates now and in the future. As in 2021, the potential exists for supply disruptions and a cascade of cost impacts.

For food and beverage manufacturers and brands, this scenario is nothing new, and many brands have already taken the long-term lessons to heart. With the potential for supply chain disruptions and spikes in costs to appear seemingly out of nowhere, finding, qualifying, and onboarding new suppliers quickly is an important organizational competency. Nor is it simply an issue for procurement teams; FSQA and regulatory organizations are impacted as well, and cross-team collaboration can make or break the overall effort.

Fast and effective supplier onboarding doesn’t happen by accident. Let’s discuss five important tactics that can not only make a meaningful difference in the time required to bring new suppliers on board, but can also lead to better supplier partnerships and a more agile sourcing strategy over time.

  1. Don’t continually reinvent the wheel.  A surprising number of organizations rely on largely ad hoc processes when selecting and onboarding a new supplier. When this happens, the same problems may need to be solved repeatedly, often in inconsistent ways. The process slows down as onboarding processes need to be created, not just executed. Standardized and repeatable processes give teams a consistent template to follow, ensuring that steps are performed correctly and that none are missed. If qualification and document collection processes are performed consistently, suppliers will all be on the same footing for evaluation.
  2. Score and evaluate. Whether for initial qualification and selection, or for future deal making and contracting, it’s important to know what your expectations of suppliers are, and to have a strategy for measuring performance. A strong, objective supplier score card works to the benefit of brands, manufacturers and suppliers alike, as top performers quickly rise to the top, and problems are spotted and dealt with early, before they’ve had a widespread, negative effect.
  3. Use smart risk assessment tools. The food and beverage supply chain is the largest and most fragmented in the world, and there are no shortage of things that can go wrong. Ad hoc processes for supplier risk evaluation can easily miss important details, and manual searches for information can be time consuming and error prone. Have a centralized and consistent strategy for managing supplier risk is essential, and tools exist to support proactive alerting when something takes place that needs your attention.
  4. Digitize. It’s said all the time, but it bears repeating: documents in a file system, no matter how well organized, will never provide the capabilities for analytics and dashboarding that you need to truly optimize your business and processes. Embracing a strong digital strategy turns isolated information into centralized, actionable data, essential when you need to react quickly to events.
  5. Draw on a Network. Finding and engaging with suppliers on your own is time consuming and risky. Increasingly, suppliers can be accessed through networked ecosystems united by common data structures and tools, where information exchange is standardized, and supplier performance data is readily available. When brands, manufacturers and suppliers are able to speak a common language and communicate efficiently, everyone is able to move in sync, taking both time and risk out of the equation.

In a world where disruptions and cost instability will likely always be the norm, it’s impossible to plan for every contingency. TraceGains Supplier Management is the tested, industry standard for digitizing your supplier relationships, accessing the world’s most powerful supplier network, and creating a more agile supplier onboarding process flow. Most organizations find a majority of their current suppliers are already part of TraceGains Network, allowing you to skip straight to the efficient exchange of documents and information. And when new suppliers are needed, TraceGains Gather® provides intelligent search tools with instant access to hundreds of thousands of ingredients and millions of supplier documents. Backed by a suite of advanced features including one-click document requests, risk scoring for suppliers, and customizable dashboards, TraceGains gives you speed and agility, while keeping you audit-ready and compliant no matter where in the world you operate.

Download our 9 Steps to a Strong Supplier Approval Program ebook to learn more.

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