You can choose to use the Supplier Approval function or just use the compliancy rules. If you setup Supplier Approval, it works until the supplier is approved then they would fall under the Compliancy Rules you have setup on an ongoing basis. If you want to activate the Supplier Approval function you setup in the same way as above but when adding the rule you select Approval Process instead of Standard. 

Step 1: Select Add Compliance Rule as above

Step 2: Select Approval Process 

Step 3: Follow the same steps again in Setup Compliance Rules to setup the rule for your Supplier Approval Process

Step 4: Your Supplier Approval Process setup will look the table below when complete. The tick indicates the Approval Process is turned on for those suppliers or supplier types.