All organizations work with outside vendors and suppliers that provide goods and services, such as raw materials for a manufacturing process, outsourced labor, and finished products. The most effective organizations are the ones that actively partner with their vendors up and down the supply chain, rather than simply seeing the buying process as transactional.

Getting off on the right foot with new vendors by using a consistent and repeatable vendor onboarding process can strengthen that partnership. A learning management system is a good way to deliver the key pieces of an onboarding program that enable a mutually beneficial relationship.

So, which of your vendors would benefit from onboarding? All of them! For example:

• You’re a manufacturer using offshore labor…
  • Train the factory workers and managers on the quality standards for your finished goods
  • Ensure all compliance standards are met through use of system functionality like e-signatures, course versioning, and more
• You require your partners to use a centralized vendor management system…
  • Educate them how to use the system and the best way to interact with your procurement department
  • Easily send updated SOPs and documentation to those who have already completed or read through the outdated material
• You rely on third-party field service technicians…
  • Give them the skills they need to service your particular equipment correctly
  • Conduct on-the-job training through features such as checklists

Here are four reasons why investing in vendor onboarding using an LMS is a good business decision:

Risk mitigation

Vendor onboarding is an important assurance when it comes to compliance with governmental and industrial regulations, and even for compliance with your own internal policies. Specific pieces of LMS functionality can help assure compliance for those who must follow 21 CFR Part 11, such as e-signature, version control, and audit trail.

This compliance can also extend to continuing education requirements that your vendors may have in order to operate within set guidelines. Automate this process by setting notifications and training to be recurring, set deadlines, and more.

Delivering consistent training and awareness to your vendors reduces your liability, and the LMS makes it possible to track required vendor certifications and renewals.

Improved efficiency

Make it easy for your vendors to work with you by giving them the information they need about your processes, systems, payment schedules, etc. An onboarding process with automated workflows can expedite the exchange and validation of critical data at the outset of the relationship.

Stronger relationships

The very fact that you’re providing a professionally delivered onboarding program shows vendors that you value them and are committed to their success. Today’s complex and integrated supply chains make it even more important that every piece operates harmoniously.

Enhanced reputation

A poorly-performing vendor can directly reflect on your brand and cause damage to your reputation. Effective onboarding can communicate your expectations and ensure your vendors are aligned with your standards for customer service and ethical conduct.

5 Mistakes to Avoid

Vendor relationships can look very different depending on the nature of your company, the nature of the vendor, and the nature of your partnership. Similarly, the nature of your onboarding will vary greatly depending on these factors as well. Your onboarding may include a short document about your company and products or services that all vendors are required to read. Or, your onboarding could be more in-depth and include several initial product training courses with ongoing updates and just-in-time training options. No matter if it’s a quick PDF or PowerPoint, or a more full-blown training program, vendor onboarding requires a certain amount of up-front and ongoing effort to create a successful, healthy vendor relationship.

Here are some common mistakes associated with vendor onboarding, no matter the size or complexity of the relationship.

Lack of Communication

This is number one. Good communication is the gold standard rule for all positive business relationships. This is especially true with working externally. After all, someone outside of your company may not have the same communication etiquette as your company may hold internally.

With vendor onboarding, it’s key to communicate:

• Expectations from both parties. A good business relationship needs very clear-cut outlines on what each party needs from the other. Just because they are the vendor doesn’t mean you’re the only one who should be setting expectations – make sure you’re also asking what they need to be set up for success.
• Plans for the future. This will be touched on later as well, but making plans for scalability and continuing the growth of your relationship is important. Make sure that your company has a contact who is regularly checking in with the vendor

Making Your Process Too Standardized

It’s tempting to create a standard onboarding process and roll it out to whatever vendor comes along, no matter who they are. It may seem the most efficient, but it could harm you in the long run by creating unnecessary stress for your vendor and wasting time. Certain vendors may require different kinds of paperwork and training.

It’s not a bad idea to create onboarding procedures, but it’s recommended to leave room for flexibility so you are only completing the tasks you actually need for each unique business partnership.

Fail to Complete Due Diligence

Not all vendors are equal, and before signing into an expensive partnership, you should be completing risk assessments of each vendor. A small overlook could result in a huge setback for your company if you choose a vendor without checking their references, business history, and reputation. Some areas that need to be evaluated include:

• Whether the reputation of the vendor will satisfy customers.
• Whether the service the vendors provides will truly provide enough benefit or ROI for the business.
• Whether the vendor meets legal compliance. It’s possible that if a vendor isn’t following protocol, it can affect you in some way, whether it’s in lack of safety or any number of legal issues.
• Whether the vendor is capable of following through on contracts.
• What kind of risk-management the vendor has built to protect themselves, including insurance coverage and financial stability.

You also need to ensure the ways you and the vendor approach business will be compatible. Different businesses have different philosophies and attitudes about conducting business, and compatible attitudes will help create a long-lasting, thriving business connection.

Fail to Plan

A great vendor is in for a long-time partnership with your company. Planning ahead for the future of the partnership, especially in areas where you might like to scale and expand if the partnership continues to be successful, is vital. Some things to consider planning for when onboarding a new vendor:

• The timeline for each step of the onboarding/implementation process.
• Who will be in charge of regularly keeping in touch with the vendor and who will monitor to ensure they stay compliant and that they are fulfilling your company needs.
• How often the vendor will need to be audited for their work.

Fail to Supply Training

The amount of training vendors will require can vary; however, vendors usually need some kind of education to understand how to best fulfill the contract with your company. Depending on the type of vendor, this can range from teaching the protocol for delivering supplies to your business to a full training on use of equipment or other aspects of dealing with you, your products, and/or your services.

No matter how simple the training needed, whether it’s a handbook or a full-fledged class or online course, make sure to have it prepared so that vendors can have access to consistent, well-designed training.

These areas are often overlooked, but making sure to touch each area when considering vendor onboarding will ensure a smooth partnership for years to come.