The success of your eCommerce business depends heavily on your ability to handle your inventory, order, warehouse and return operations without any obstructions or errors and to achieve that, you must have the right Warehouse Management System taking care of your requirements.
But to make the right decision of choosing a technologically advanced Warehouse Management System you need to be well accustomed with all the processes involved that differentiate the best from all the rest.
This 5 part series of articles has been designed to give you a complete walkthrough of all the major processes required to help you run your eCommerce operations seamlessly, focus on gaining more profits and to increase your overall productivity.
The first part of the process is to pick out the right vendors who can provide you with the correct assistance in terms of availability of material as well as services.
Vendors help you with all your daily needs and supplies whether they are for your business needs or facility requirements. You need them for almost everything on a regular basis, even multiple vendors to fulfil a variety of your demands at different prices or quantity.
But with different vendors involved, you may need separate ways to keep a track of their details, your demands, prices for your supplies, delivery times of each product and much more.
The process of vendor selection and onboarding can be a real task if you do not know where to look for them, but with a fully integrated and completely automated WMS solution, you get to screen out the most appropriate service providers that align well with your business needs.
The steps of Vendor Onboarding includes:
Creation of Vendor Agreement
At first, you need to gather up all the information that you could find about your Vendors and then include them in a well-elaborated and clearly defined agreement. The necessary conditions and clauses your agreement should have include:
- Full name and addresses of both parties
- Goods and Services Offered
- Confidentiality of information exchange
- Coverage of loss or damages
- Causes if Termination of contract
Development of Guidelines for Payment Processes
After an agreement has been made between both parties, it is necessary to lay some guidelines in terms of payments in order to avoid any issues or disputes.
Your ability to convey clear and understanding rules on payment processes can help your vendors not only be well informed on all aspects of their services but also to improve the quality of services offered to you. Major points to keep in mind when you are developing guidelines for payments, include:
- Quoting Final Prices for Product Offerings
- Providing correct details of payable accounts
- Highlighting terms of payments
- Generating detailed and clear invoices of services offered
- Following industry tax standards
Establishment of Rules for Delivery
As the two fundamental requirements are cleared up, you need to also provide your conditions for how you expect the vendors to make deliveries of the products and services.
Figure out your expectations first based on your consumer reach and demands and then go ahead with some basic instructions for your vendors to follow, such as:
- Providing a proper timeline for deliveries
- Conveying reasons for delay if any
- Ensuring to meet delivery requirements
- Highlighting types of insurances offered for each service
- Implementing proper security support for products
Registration of Vendor and form updation in ERP system
To seize the vendor onboarding process, you need to register your vendors on a portal to ensure all terms are agreed upon and conditions are met.
Post-registration, the vendors need to:
- Add documents that specify their service capabilities
- Declare adherence to company policies of performance
- Provide industry-specific compliance documents
- Add purchase order and invoice transmission preferences
Dry run and testing of complete inward cycle
It is necessary to test a purchase-sales workflow to get a fair idea of the forward proceedings and to do that you can begin with product purchases. The method to do so includes:
- Choose a preferred vendor and initiate a purchase order
- Finalize a small amount for a fixed purchase price
- Generate the purchase order invoice
- Complete the payment to the vendors
- Post receiving the orders, start your sales process
- Dispatch your products and initiate customer invoices
- Get the payments, analyze the process and contemplate the results of the test
Segmentation and Prioritization of vendors
With more vendors, you need more management and the level of that can vary for each one of them. This task can be carried out by segmentation and prioritization of vendors based on their role and dependency for your business.
Vendor segmentation is done by figuring out how aligned are your vendors to the business model you have selected and what would be the exit strategy for your business in case of disputes.
You can basically segment your vendors into four sections, based on your relationship with the more than just the delivery of services:
- Emerging – the ones who help you set a strong foot in an emerging market with unique and innovative services
- Strategic – those who are the primary service providers for your business and are well aligned with all the requirements of your business.
- Tactical – the ones that can be of low assistance to your business and majorly provide transactional support.
- Legacy – those who have been providing essential services for your business in the past but now little value of their support.
Depending on the role each of your vendors play in supporting your business you need to decide which to prioritize and focus on. It is necessary to develop strong and steady acquaintance with your vendors, rather than just being fixated on the pricing and delivery of performance by them because that will help you and your business achieve better overall performance, have value-driven participation from your vendors and maximize your profits for the long haul.
Once the entire process of Vendor Onboarding is completed, you need to move on to the next step of your warehouse management which is of Procurement.
Procurement is a process where your service providers agree to the entire framework of operations set in the onboarding process and then provide their services to you based on those exact terms and conditions.
The important steps to ensure the Procurement process happens without any difficulties include:
Sales forecasting helps you decide what and how much to ask from your vendors in order to seamlessly deliver good customer service.
In procurement processes, this activity is carried out by the internal sales team and involves analytical estimation of future sales based on sales data acquired in the past months, ongoing or upcoming trends, industry-wise comparisons etc.
The analyzed report is then sent to the procurement team which further sends an ASR or Advanced Shipping Request to the vendors.
Vendor Updation on Availability of Products
ASR sent to the vendors contain all the information about the quantity required and based on that vendors confirm availability of goods post which a Purchase Order request is raised by the warehouse.
Shipping Notice and Consignment Generation
After a Purchase Order or PO is raised, the vendors create an ASN or Advanced Shipping Notice and then ship the required amount of products to the warehouse.
Here is a detailed flow chart to help you understand the entire process of Vendor Onboarding and Procurement.
These processes are must-have deliverables of a robust Warehouse Management System to strengthen the overall productivity of a business, helping them scale up profits and Unicommerce is one such platform that provides a 360-degree experience to businesses who wish to achieve the same.
The vendor management solutions provided by Unicommerce consist of a variety of options for businesses to have complete control over their vendor relations and achieve better performance from their end.
Some of the key advantages of using the Unicommerce platform involve:
Vendor Portal – onboard, manage and communicate with your vendors in real-time right from a single panel.
Vendor Priority Settings – select your top vendors by simple steps and work with them continuously on enhancing your services.
Invoice Submission – strengthen your vendor operations using the highly advanced invoice submission feature of Unicommerce involving Invoice and PO submissions, PO flip and Invoice Tracking, etc.
Vendor Visibility – handle invoice status, queries and have complete visibility of any delays or discrepancies
Reporting and Analytics – keep track of vendor services and make smarter procurement decisions based on performance analysis.
ERP Integrations – integrate to ensure ERP system as the primary owner of vendor master data.
With these highly advanced and technologically superior solutions of Unicommerce, your business is sure to gain higher labour productivity, improve warehouse space utilization, gather better inventory visibility, enhance accuracy and much more.
Experience the true potential of your business with us today, click here to know more about our services or request a demo today!
Check out the next part of blogs series which highlights the major operational processes such as Receiving, Putaway, Picking, Packing, Dispatch and Returns
- Boost the Efficiency of Warehouse Operations with Packing and Dispatch
- Simplifying Receiving and Putaway Operations of Warehouse: Prerequisites of Warehouse Management
- Enhance the Operations of the Warehouse with Order Picking: Process and Methods
- Warehouse Returns and Cancellations Management [Reasons, Problems and Solutions]