What is it & why you need to do it before signing the contract.
For Small or Medium-sized Enterprises (SMEs), or any company that is starting up, there are numerous hitches that may pose as business nightmares. Managing Suppliers is one such hurdle.
If your Company is into procurement, you know how important it is to have a Validated Supplier pool. One of the pressure points in the procurement industry is not having a properly vetted Supplier database to meet your requirements. A system that continuously monitors and validates Suppliers to ensure you have the right information for immediate engagement is crucial. But what is a Validated Supplier pool? And why do you need one? We have Mr. Karthikeyan Adithan, BGI’s Procurement Consultant, to answer those questions.
As an Organisation engaging in compliant services, your business involves mostly engaging with Suppliers, checking their credibility, and ensuring they offer quality Products or Services. Conducting a Supplier Validation Process is critical to ensure that your business gets significant gains. Here’s what you need to know about Supplier Validation and why it is essential for organisations focused on Compliant Services. Also we will be providing you with some helpful insights to overcome the pain areas faced in the Supplier Validation.
What is Supplier Validation?
The Supplier Validation Process is a series of activities that are performed to verify a potential Supplier, to deem them credible to meet the requirements of your (or your client) Organization. These activities can include, but are not limited to, reviewing the Supplier’s updated contact records, financial statements, manufacturing capabilities, quality control procedures, and delivery records.
How often should a Supplier be validated?
The frequency of Supplier Validation should be based on the level of risk associated with doing business with the Supplier. For example, if you are considering using a new Supplier for a critical component, you may want to conduct a more thorough investigation on the chosen Supplier to assess if they will be capable of carrying out your requirement. In general, it is recommended that Suppliers be validated at least once in six months to ensure the details are updated.
Why is Supplier Validation important?
A Validated Supplier Pool is required in procurement to ensure that you are receiving the highest quality products and services for your company. Here are our outcomes from our experience on why you need Supplier Validation
- Allows one to acquire holistic information on the Supplier, their history and track record.
- Helps avoid potential problems such as logistics, receiving defective products or having to deal with uncooperative Suppliers down the road.
- Avoid financial risks.
Although it may take some effort, validating Suppliers is generally a worthwhile endeavour for any business that wants to safeguard its interests and optimise its operations.
How did businessgateways JSRS make an impact in the Procurement Challenges faced by the Oman O&G industry.
We would like to share our experience on the Procurement Challenges faced by the Oman O&G industry Pre-2014, How businessgateways‘ ‘JSRS’ procurement system made an impact in the Oman O&G industry with a buyer’s capacity of USD 160 BN and a Supplier Pool from across 100+ countries with 100,000 Products / Services.
Operators managed their own pool of Suppliers. When viewed from a national level, massive effort duplication was seen within the overall Oil & Gas Industry. Procurement divisions faced counterproductive challenges in terms of supplier monopoly, owing to prolonged engagement with a limited pool of suppliers. Suppliers on the other hand, had to keep updating their details individually with each Operator. In most cases, they lost business opportunities from other Operators.The Joint Suppliers Registration & Certification System (JSRS) of Oman was the result of a quest to find a solution to these multi-layered procurement challenges faced by the Oil & Gas industry. On behalf of the Oman Ministry of Energy and Minerals and Oman’s Oil & Gas Operators, Business Gateways International LLC (businessgateways) – an Omani company providing national level ITES solutions, created and implemented the ‘Joint Suppliers Registration System’ (JSRS) on its flagship portal www.businessgateways.com which addressed all these challenges in detail.
The “Single Window” JSRS Registration & Certification of Suppliers (Omani & International) was made Mandatory since 2014 by the Oman Ministry of Energy and Minerals, and connected JSRS Certified Suppliers to ALL Operators in Oman. It also brought together all the Stakeholders in the Oil & Gas Industry onto a single online procurement platform. The key companies utilising the JSRS Certified Suppliers include the Oil and Gas operators such as., Petroleum Development Oman (PDO), BP Oman, CCED, OXY, etc., to name a few.
Today the success of the JSRS has seen its expansion from Oil & Gas to Other Industries. The ‘JSRS Buyers Community’ consists of major organisations with large procurement spend, who are presently using the JSRS Certified supplier’s pool for their procurement.
The JSRS with its current & dynamically updated supplier data and monitoring mechanism enables the Buyers Community to select Suppliers based on various eligibility criteria, and to propagate tenders to them. It also enabled them to easily search & identify eligible Omani SME companies for allocation of Oman Ministry of O&G In-Country Value (ICV) benefits.
This initiatives by businessgateways that holds global promise for procurement and international partnerships in the region:
- Expansion of the NBF & JSRS platforms across the GCC, (Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, and Oman):
- For suppliers from India and the world over who are Oman JSRS Certified, this could mean easier and more efficient access to business opportunities in the entire GCC Region.
How could we provide the same solution for you?
Our expert analysts provide solutions for the procurement challenges faced by companies ranging from industry bodies (Private & Public) to large & small companies.
With our experience in building and implementing the required standard operating structures of supplier validation models built around online submissions and approval processes that can be tailored with client’s needs every step of the way.
Supplier Profile Management: Through profile management, Suppliers can provide details about their company, contact information, business classification, and category information about the Products / Services.
Data Validation: This is a series of activities that are performed to verify a potential Supplier, to deem their credibility to meet the requirements set by an organisation.
Performance Feedback: A comprehensive system for evaluating Supplier performance to reduce risk in the contract awarding process hence proving the Supplier’s credibility and performance reports.
In Conclusion
Conducting a Supplier Validation Process is critical for any business, as it helps to identify and assess Supplier risks. By conducting a Supplier Validation Process, businesses can ensure that they are working with reliable and trustworthy Suppliers who could potentially turn into trusted resources in the long haul.
Business Gateways International has been studying the Supplier Validation Process for many years. With that knowledge and access to many mechanisms involved in properly verifying, we can be certain to work with you to overcome your obstacles. This way, you can ensure that your procurement team is well-equipped with the necessary supplier data and that a smooth process is in place. Please contact our consultants if you require any additional information about the process; we will be happy to assist you.
