6 Essential Elements of Effective Supplier Integration

September 14, 2016

One of the central challenges faced by every supply chain team is the effective integration of suppliers. Managers in our industry can work long and hard to implement the right technology and set expectations internally, only to have an external supplier miss the memo and bring things to a grinding halt.

From poor communication to a lack of supplier buy-in, there are many reasons this disconnect could occur. As the saying goes, you’re only as strong as the weakest link in your (supply) chain!

That’s why we’ll be spending a good portion of this month looking at supplier relations and effective onboarding techniques, starting today with the fundamentals of successful supplier integration.

weak link in supply chain

6 Important Elements of Supplier Integration

With the right blend of awareness and education, the process of integrating service providers into your supply chain becomes significantly smoother.

Ensure you cover these six aspects of supplier integration to keep all parties as engaged as possible:

  1. Get the news out early: No-one likes surprises. The earlier you can let suppliers know that a change is coming, the more time you have to hear their concerns and address any challenges that they anticipate. For new suppliers, make sure that you have a clear and realistic timeline for onboarding that they can be handed on day one for review and response.
  2. Request feedback at every step: The best-laid plans of mice, men, and supply chain managers often go awry.” Not all of those parties are included in Robert Burns’ classic quote, but there’s no doubt he would have included our profession after a few days on the job! Trust the integration plan that you’ve formulated for step one, but understand that it will require revision. Asking service providers for their input at every stage helps to improve that plan and increase supplier buy-in.
  3. Don’t overcomplicate the process: There’s always the temptation to use the latest technology and advanced systems to keep track of intricate processes. These can be beneficial, even crucial, in some scenarios, but often it’s the simplest solution that proves to be most effective. Focus on efficiency and ease of use before you adopt a new system, both to maximize understanding and minimize supplier frustration.
  4. Set expectations (and stick to them): It’s important to consider feedback from service providers, but it should never fully dictate the choices you make. The final decision of the systems you adopt – and setting appropriate service levels – should serve your business, first and foremost, only adjusting to supplier requirements when it has no negative impact on your organization.
  5. Don’t bite off more than you can chew: If you use multiple service providers, try to avoid bringing them all over to a new way of working at exactly the same time. Unless you have the resources to ensure a dedicated contact for each supplier, prioritize them into different tiers and bring each group aboard in manageable batches. The same goes for bringing on new suppliers. If you anticipate a glut of new providers coming online in a short period of time, try to stagger the process to avoid taking on too much all at once.
  6. Set regular reviews and training schedules for the first year: With every project, there’s a temptation to move on to the next job when the primary objective has been achieved. That cannot be the case with supplier integration, where ensuring understanding and compliance is central to success. Your onboarding plan needs to extend beyond the agreed go-live date, setting up monthly reviews in the early stages, allowing for more feedback, adjustments, and making additional training resources available where they are required.

supplier integration moving cogs

In the initial stages of integration, suppliers will require guidance and may need to be convinced that the proposed processes are worth their while. This is why starting out early is so important. With the right plan in place and an approach that involves your key service providers,

Even taking into account the ideas above, it’s likely that some suppliers will still resist new approaches that stretch their services. Extra effort and resources may need to be employed in these cases,

The more involvement and communication that you can offer in a supplier integration process, the more confident you can be that service providers will come on board understanding your requirements and committed to delivering for your company. This breeds a healthier relationship between all parties and serves to increase supply chain efficiency as a result.

No-one ever said that supplier integration was easy, but following these simple steps goes a long way to keeping unpleasant surprises at bay!

 

 

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