How to Build an Efficient Supplier Enablement Process

Is paper bogging down your procurement process? If so, it’s time to reconsider how you connect with your most important suppliers. With procurement technology, you can streamline vendor and purchasing activities into one comprehensive and efficient tool.

Supplier enablement improves every aspect of the procurement process with faster cycle times, fewer issues, more productivity for accounts payable teams, and stronger long-term relationships with your most important suppliers.

This article covers everything you need to get a supplier enablement practice up and running, including:

What supplier enablement is
What a typical supplier sourcing process includes
5 steps to creating a supplier enablement strategy
5 best practices for supplier enablement
7 supplier enablement tools and features to look for

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What is supplier enablement?

Supplier enablement is a strategy for centralizing electronic vendor information and purchases within a software platform. Its primary goal is to streamline the procurement process between buyer and supplier systems, making purchasing easier and more efficient for both parties.

Supplier enablement provides the necessary tools and connections for electronic data interchange (EDI). It automates ordering, streamlines payments, and makes it easier to resolve issues.

Through supplier enablement, businesses improve operational efficiency, reduce costs, and increase transparency in supply chain operations while building lasting, resilient relationships with their most important suppliers.

What does a typical supplier enablement process include?

When choosing a supplier for a specific category or need, follow these five steps of supplier selection and onboarding:

1. Supplier identification: Identify a potential supplier based on their capability to meet the company's needs. This can be done through market research, trade shows, online searches, or recommendations. Start with a shortlist of vendors that might be able to meet the needs and parameters of the project, then begin the evaluation process.

2. Supplier evaluation: After identifying potential suppliers, evaluate them based on criteria like price, quality of goods or services, delivery time, reputation, and financial stability. Many procurement professionals follow a “three bids and a buy” approach to vendor sourcing, selecting from a shortlist of three bids or RFP responses based on the criteria most important to the project. Evaluating suppliers to determine whether they can consistently meet the company's requirements helps prevent future issues.

3. Negotiation: Once the team has evaluated and selected the best vendor, negotiating terms of service, pricing, and other contractual details begins. While price is important, it’s not the sole factor to consider. Negotiate the entirety of the deal based on the total value and potential for a long-term partnership.

Developing open communication during this phase is a must to ensure all parties clearly understand expectations. Legal and security teams should also conduct necessary risk assessments or supplier questionnaires to establish third-party security in the negotiation phase.

4. Onboarding: Bring on the new supplier with a streamlined onboarding process, incorporating systems integration and aligning with the company's operational framework.

Key activities include:

Establishing main contacts for the account
Data exchange integrations
Invoicing and payment setup
Future vendor evaluation setup

Strong procurement practices begin with the end in mind. An effective onboarding process pulls together all necessary information and permissions to bring a supplier online. It also considers the tools and data necessary for ongoing evaluation, scoring, and potential future off-boarding should the engagement end.

5. Continuous improvement vendor lifecycle maintenance: Strong vendor relationships rely on regular analysis to ensure contracts and service levels remain competitive. These practices assess a provider's performance, reliability, and adherence to standards using key performance indicators (KPIs). Through continuous monitoring and periodic reviews, organizations can ensure quality control, optimize supply chain efficiency, and foster sustainable partnerships.

5 Steps to creating a supplier enablement strategy

If your company is early in its supplier enablement journey, organizing purchasing and business data from the start will go a long way toward developing efficient working relationships. When implementing or refining strategic sourcing and supplier enablement, use these five steps to create solid and consistent systems:

1. Assemble a preferred vendor list

If the organization doesn’t already have a preferred supplier list, ask the procurement or supplier enablement team to compile spend data from all vendors for the past 6 to 12 months. Look for purchasing trends to identify potential strategic suppliers (the most prominent suppliers for your organization). Use this data as a basis for a preferred vendor list.

Within the list of vendors, identify opportunities to reduce the vendor pool to one or more suppliers to serve each spend category. Adhering to a short list of suppliers increases spend volume with each preferred vendor, unlocking the potential for discounts and stronger partnerships.

2. Create a procurement policy and process

Procurement policies outline procedures for purchasing goods and services, ensuring consistency, transparency, and efficiency.

When developing procurement policies and processes, make sure they align with the organization's overall goals. Define clear roles and responsibilities for internal and external stakeholders. This includes requestors, approvers, and those managing supplier relations.

Establish budgetary guidelines for purchases, such as spending limits, competitive bidding requirements, and preferred payment methods. Specify vendor selection criteria, including financial stability and track record. Create a section on monitoring and reviewing procurement activities to ensure effectiveness and identify areas for improvement.

Once the policies and processes are complete, communicate them across all levels of the organization to ensure understanding and compliance.

3. Automate the order process

Leveraging technology streamlines and digitizes all aspects of procurement, including purchase requisitions, approvals, ordering, and invoicing. With an automated system in place, organizations significantly reduce manual intervention in the buying process.

Procurement automation has several advantages, such as:

It increases efficiency by eliminating time-consuming paperwork and reducing the likelihood of errors due to manual data entry.
Automation provides greater visibility into procurement activities by centralizing information in an easily accessible single platform. Increased real-time visibility allows for better decision-making based on accurate data.
Ordering automation facilitates seamless communication between the organization and its suppliers. It enables direct transmission of purchase orders to vendors and accurate updates about order status.
Automating the order process supports strategic objectives such as cost control and risk management. Organizations can prevent overspending when leaders establish predefined spending limits within the system.

Automating the order process bolsters supplier enablement by making procurement more efficient, transparent, and strategic, as well as aligning it more closely with organizational goals.

4. Centralize invoice processing

Finance teams strengthen financial operations when they consolidate all invoices in one location. This approach eliminates potential miscommunication and enhances transparency with suppliers, fostering a stronger, more trusting relationship.

Invoice centralization also ensures timely payments, reducing late fees and unlocking early payment discounts. It simplifies spend tracking, aids budget management, and enables strategic cost control.

By integrating centralized invoicing into their system, organizations can achieve better supplier enablement. It not only improves efficiency but also aligns procurement processes with organizational objectives.

5. Automate payments

Automating vendor payments streamlines the payment process, minimizing human error and speeding up transactions. Automatic scheduling ensures timely payments, enhancing trust with vendors and potentially opening up early payment discounts.

A payment automation system also reduces the accounts payable team’s administrative burden, allowing team members to focus on strategic procurement activities. Real-time tracking of automated payments supports accurate budgeting and spend analysis, driving cost control and financial efficiency. Ultimately, automated payments foster stronger supplier relationships, aligning with broader organizational objectives for improved operational performance.

Supplier enablement tips & best practices

Every process has potential for improvement. Supplier enablement best practices create more streamlined, efficient results.

Integrate with other systems: Ensure your procurement platform integrates with the rest of the technical stack for seamless data transfer and real-time visibility into your supply chain operations. This includes enterprise resource planning (ERP) systems, accounting systems, and other information sources.

Prioritize supplier compliance: Use the platform to maintain records of supplier compliance, ensuring vendors meet all regulatory and business requirements. Perform regular audits of compliance and commit to a vendor scorecard program. These efforts reduce third-party risks and ensure suppliers remain competitive.

Utilize analytics to identify spend patterns: Procurement tools make it easy to review spend management and spot patterns in purchasing. Use transaction and supplier data within the platform to gain insights into spending trends, supplier performance, and potential areas for improvement.

Review and update your strategy: As business needs evolve, so should the supplier enablement strategy. Regularly revisiting and adjusting it ensures continuous improvement in efficiency.

Use a procurement platform: Look for a single platform that streamlines processes, reduces errors, and improves efficiency. The right procure-to-pay (P2P) process incorporates direct integrations, automated workflows, AI enhancements, and next-generation procurement management to take the manual labor and repetition out of purchasing supplies.

7 Supplier enablement tools and features to employ

Integrating supplier enablement into every aspect of your procurement practice is valuable. Numerous tools and features are available to help manage supplier information, enable purchasing, automate workflows, and automatically pay invoices. All these features result in stronger supplier relationships, more effective procurement, and better cash optimization.

The following are the top seven features and tools that make supplier enablement easier. Many of them can be found within a single platform:

Vendor management software: This tool allows businesses to manage and control vendor relationships effectively, ensure compliance, and reduce vendor fraud and third-party risk.

eSourcing platforms: These platforms provide a centralized location for supplier discovery, evaluation, and bid management.

Contract management systems: These systems manage and automate the contract lifecycle, from creation to renewal or termination, enhancing visibility and control.

Spend analysis: Spend tracking and analysis tools enable organizations to examine their procurement spend data to identify cost-saving opportunities and improve efficiency.

Supplier performance dashboards: Vendor lifecycle management offers real-time insight into supplier performance metrics, helping businesses make informed decisions.

Supplier information management (SIM): Information management systems centralize all supplier information, making it easily accessible for review and analysis.

Procurement software: These comprehensive tools encompass all aspects of procurement processes, including purchase requisitions, purchase orders, invoicing, and payment.

Get Order.co for total supplier enablement in one platform

Top procurement management solutions offer many of the features highlighted above, but Order.co goes further by offering them all in one place.

Our procurement management and spend management tools combine the information, integration, and data analysis necessary to build lasting, cost-efficient supplier relationships with your preferred vendor list. Order.co gives procurement teams of all sizes tools to fully understand their spend, get the best prices and terms on supplies, and automate repetitive tasks for quick and easy reconciliation and payment.

Learn more about supplier enablement with Order.co. Schedule a demo today.

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