19 Nov 14

Supplier due diligence – the DOs and the DON'Ts

YesNoOver the last few years there has been a welcome growth in buying organisations recognising the importance of understanding the behaviour and practices of suppliers in their supply chain. 

However, for every buyer transitioning to an online solution, there are hundreds more suppliers about to be bombarded with yet another offline questionnaire or interrogated by consultants on a buyer’s behalf.  Unsurprisingly, this is leading to supplier fatigue and corresponding low compliance rates.

After working with many buyers over the last few years, we have developed a set of simple dos and don’ts to help buyers achieve their objectives and ensure supplier compliance, realising the benefits of online supplier management.

The DOs

Do be clear on your objectives upfront.  What do you want to know from which suppliers and why?   

Do use existing supplier portals or solutions that allow suppliers to share their information with multiple buyers.

Do keep it simple and invest time making sure the process is quick and easy for suppliers to provide the information you require.  We have all started to complete questionnaires only to find open ended, poorly thought out questions and put it aside as a job for later.

Do make it easy for suppliers to respond. Using closed questions such as multiple choice, drop down menus and date entries ensures that supplier response times are minimised.  Using an online solution further benefits suppliers by ensuring questionnaire progress can be saved and in some instances responses are also reusable.  

The DON'Ts

Don’t view this as an opportunity for differentiation or competition. Suppliers won’t be impressed by your creativeness or complexity and after all there are only so many ways that buyers can ask a supplier if they have a Health & Safety policy.

Don’t expect suppliers to respond to a simple single request out of the blue. High supplier uptake is a result of an effective communication plan that covers both your suppliers and your internal stakeholders.

Don’t ask for information you don’t need or can’t use.  Review every question, and ask yourself if it is really necessary, whether the response will be meaningful to you and what you will do with the information.

Don’t make it voluntary. As an organisation you either need information from your suppliers or you don’t. If you do, then be prepared to be clear that this is a requirement of doing business with you.

Achieving 100% compliance is not impossible; many of our clients do, but it requires thought and a focus on both your needs and how to make the process simple and efficient for your suppliers.

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Supplier Management

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