Supplier Due Diligence – The DOs and The DON’Ts

• Katherine Prove

• Last Updated: October 25, 2024

Over the past years, more buying organizations have begun to see the value in understanding supplier behavior and practices. However, for every buyer adopting an online solution, hundreds of suppliers still face offline questionnaires. Some are even questioned by consultants on the buyer’s behalf.

Unsurprisingly, this causes supplier fatigue and low compliance rates. Based on our work with many buyers, we’ve developed a set of straightforward dos and don’ts. These help buyers meet their goals, perform supplier due diligence, and ensure compliance, while gaining the benefits of online supplier management.

Supplier Due Diligence – 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 minimized.  Using an online solution further benefits suppliers by ensuring questionnaire progress can be saved and in some instances responses are also reusable.

Supplier Due Diligence – 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 organization 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.

Cority enables you to engage your suppliers through its award-winning supply chain sustainability software and advisory services. Our supply chain sustainability software solution aims to provide your business with transparency and compliance across your entire supplier network.

Our goal is to help organizations meet their ESG and sustainability goals while reducing the burden. To learn more, talk to us today!

• Explore Related Topics
• ESG Management, Sustainable Supply Chain

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