Automatic Processing of Supplier Responses

Automatically qualifying suppliers during various business events throughout the supplier lifecycle helps organizations screen their suppliers strategically. Finding a viable supplier is challenging mainly due to the need to verify the supplier's ability to meet the buyer's many requirements.

The buyer's requirements can range from minimizing risks to meeting business objectives such as supplier diversity. Evaluating suppliers involves a significant amount of your organization's financial and human resources. Thus the ability to automatically process supplier information from both internal responders and the suppliers themselves can reduce the investment of resources needed to vet your suppliers during supplier's lifecycle.

Qualify Suppliers

Your buying organization uses questionnaires to gather information from potential or existing suppliers based on the expected level of involvement with the suppliers (either transactions involving substantial financial relationships, or transactions involving less commitment). Your organization then evaluates the suppliers' responses to the questionnaires to ensure a supplier's compliance with one or more of your buying organization's requirements.

For example, your buying organization can have prospective suppliers that can participate in sourcing negotiations and respond to supplier qualifications, but can't be engaged in any contractual obligations such as purchase orders or agreements.

Additionally, if a prospective supplier is awarded business, the supplier's business relationship is promoted to spend authorized, allowing ordering and invoicing activities with the supplier. The qualification process performed during supplier promotion can ensure that the supplier meets certain social responsibility, safety, or quality standards, supports particular business processes, or has sufficient levels of certification.

Qualification Events

You can qualify suppliers several times over the supplier's lifecycle by identifying which aspects of a supplier to evaluate when certain actions occur. When one of these actions occurs, you can send questionnaire to supplier and evaluate the supplier response. The activities that may need additional screening of suppliers include:

• Self-service supplier registration request.

• Approved supplier registration request (internal as well as self-service request).

• Supplier promotion from prospective status to spend authorized status.

Incorporating supplier evaluations during these activities ensures that throughout the supplier's lifecycle, the suppliers provide the necessary credentials and comply with your organization's standards and requirements.

Manual Versus Automatic Processing

With manual processing of supplier responses, a supplier qualification manager is involved throughout the qualification process. The qualification manager

• Creates qualification initiatives

• Accepts the responses.

• Evaluates and finalizes the qualification and assessment.

• Creates the qualifications when applicable.

Processing all the supplier responses to questionnaire may require a significant amount of time from the qualification managers and any other evaluators.

Set Up Automatic Processing

Depending on the qualification criteria for a particular question, you can enter qualification information into the application and allow the application to perform the qualification process automatically.

To enable automatic processing of supplier responses, you define information for questions and question areas. However, you also specify the response values that are acceptable for questions. For these response values, you specify the scoring and weighting values to reflect the desirability of one response value over another, and associate the score/weight values with a particular qualification outcome. With this information, the application can process supplier responses without needing intervention from you.

To set up automatic processing:

1. Plan and define questions and scoring information.

2. Define qualification areas and add your scored questions. Also set the area to:

   • Automatically accept responses.

   • Enable scoring.

   • Automatically evaluate qualifications

   • Automatically requalify on qualification expiration

   • Automatically requalify on new response

3. Plan and define the rule sets to be triggered when

   • A new supplier registration request is submitted (internal or external)

   • A supplier registration request is approved.

   • A supplier is upgraded to spend authorized.

Once you have set up automatic processing, when one of the triggering events happens (supplier submits a registration request, the registration is approved, the supplier is promoted to spend authorized), the application uses the appropriate rule set information to generate and send out a questionnaire.