Vendor Management- Best Practices Checklist

Vendor Management

Vendors and vendor management plays a vital part in the achievement of your business, regardless of what industry you’re in. Utilizing the following vendor management best practices to affirm a solid relationship with your vendors will enhance your company’s total performance in the market. Disregarding these sound seller administration standards will bring about an unworkable relationship that could adversely affect your business.

The time, cash and energy used to sustain a positive vendor relationship cannot be measured specifically against the organisation’s bottom line. However, a constructive working relationship will result in improved client satisfaction, reduced expenses, better quality, and better management from the vendor. When or if matters arise, be assured that a proficiently managed vendor will rush to remedy the issue.

Vendor Selection Process

The vendor management procedure starts by selecting the right vendor for your business. The process may be an exceptionally long-winded and intensive undertaking if you’re unsure of how to approach it from the very beginning. You will need to analyse your business requirements, look for potential vendors, lead the company in selecting the winning vendor, and then effectively negotiate a contract without compromising.

Evaluate the Prospects

When you begin to look at specific vendors, be cautious that you don’t get dazzled by the team of overzealous consultants and sales representatives that the vendor sends in order to secure your business. Depending upon the possible size of the contract, they will do whatever is necessary. Just because they throw out all the stops in the beginning, it doesn’t mean they will be providing the same service after the contract is signed.

Flexibility

Be wary of constricting or exclusive affiliations, such as limitations with other vendors or future clients. Similarly, try to avoid contracts that contain strict penalties. If the vendor requests an exceptionally long contract, you should ask for a shorter term with an option to renew. Bear in mind, however, that it’s beneficial for you to consider all of the vendor’s wishes. If a request is small and of no real importance to you – yet the vendor insists on including it – you may choose to bend in this circumstance. This demonstrates a willingness to work towards an agreement that is equally beneficial to both parties, therefore creating a positive start to your working relationship.

Monitor Performance

It’s best not to assume that everything will go according to plan or will be achieved exactly as outlined in the contract. It’s also important to monitor the vendor’s performance in the beginning, especially the areas that are most integral to your business. For example: order completion, call answer time shipping times, quality of service performed, etc.

Communicate

Communication between you and the vendor is of paramount importance to your bottom line. Don’t accept that the vendor closely knows your business or best practices. Misunderstandings can be avoided by maintaining a solid line of communication and in turn give you the opportunity to proactively address issues before they worsen.