8 Tips for Successful Vendor Management

Are you seeking more ideas on how to solidify vendor relationships and higher quality subcontracted work completed?

To get vendors helping you in a more optimized way, take advantage of the following vendor management tips.

1. Give Vendors a Clear Picture of Your Business

Provide vendors a comprehensive picture of your priorities as they relate to the work you’re hiring them to do. This can include future plans such as a new product being rolled out, your end customer’s expectations, your forecasted projects, or other vital information to serve you. If you have a specific business issue you’d like to bounce off someone, your vendors may have a solution.

2. Build Long-Term Relationships With Preferred Vendors

Have a shortlist of preferred vendors so you can cultivate strong working relationships. Providing more financial resources towards each preferred vendor can help in receiving services more specifically tailored to your business needs. When building long-term relationships, focus on long-term savings versus short-term gains and margins. High vendor turnover leads to more time drained on orientations and can even lead to lower quality control.

3. Get Competitive Bids

At the same time as you should be building trust with your vendors, do not hesitate to get bids. Do not accept quotes without getting a sense of market rates.

The three most frequent bid documents are Request for Quotes (RFQs- typically where price is most important), Request for Information (RFI), and Request for Proposal (RFP-the document outlines a business’ problem and requests vendors to identify the solution in their proposal).

4. Understand Your Vendors’ Business Goals

Your vendors also are running a business. There are multiple things you can demand that may diminish or sever your relationship with them such as asking for repeated discounts or unrealistic deadlines. During meetings try to gather vendors immediate and year goals to see how you can contribute to them.

5. Create Mutual Win Agreements

If you wish to keep a valued vendor, focus on terms that benefit both your company and the vendor. For example, a vendor could express they are only seeking long-term contracts at this time. Incorporating that into an agreement can also potentially lead to more favorable rates on your end. 

6. Provide Vendors More Business

One of the easiest ways to ensure a vendor keeps you top of mind and can continue to operate is by providing new business to them. Referrals or additional work provided by your company are always appreciated.

7. Feedback Doesn’t Have to Be Negative

You can provide feedback to your vendors without it spiraling into an argument. As you build a strong relationship with vendors, they may not initially see it from your perspective as they do not have a full picture of your business. A customer-oriented vendor wants to provide the best service possible, and by giving them feedback, they have the chance to adjust. 

Schedule regular meetings to provide feedback and set key performance indicators (KPI) wherever possible your vendors can look to improve upon.

8. Solidify Your Vendor Management Processes

Onboarding and vendor workflows need to be in place to get the most value out of their services. By having a vendor management strategy in place, you can also help them turn around work faster.

For assistance with vendor onboarding and management, contact us today.