Vendor management is all about creating a mutually beneficial relationship so not only your company can succeed, but your vendors can successfully work with you. When you’re the company hiring you define the suppliers and what they are privy to it. As you look at rethinking or sharpening up your vendor management strategies consider the following.
Keep Them Up to Date
Schedule regular meetings with your vendors to share the latest information and priorities. Here you can monitor performance and help create more accountability. As part of ongoing vendor review, carefully look at their policies, internal controls, and ability to meet obligations. By having regular discussions you can identify their current other commitments and priorities while communicating yours.
Invite Major Suppliers To Critical Meetings
When major meetings happen where your vendor’s expertise can help cut down costs or inform your future strategy, invite them. By leveraging their expertise you can potentially improve your end service or product potentially giving you a competitive advantage. Ensure however you have a non-disclosure agreement in place.
Support Your Vendors
One key part of a successful vendor relationship is having members of your team or a third party that has the bandwidth to manage vendor relationships and identify new vendors. Task this team with finding the most appropriate vendors based on your business needs and ensuring the relationship remains mutually beneficial to both your team and vendors. The size of the team will depend on multiple factors such as:
- Your company’s size
- Number of vendors
- Number of services you’re hiring for
Understand the Full Cost of Changing Vendors
Once you build a vendor relationship so they are an integral part of your product, the cost to switch vendors can be very expensive and more costly than a short-term gain where you asking current vendors for a discount. Changing vendors frequently can cause quality assurance issues and even delay the release of new products.
Get to know your vendor’s business model and provide resources. Help them better serve you so you’re not at the last second panicking to find a new vendor after another vendor has to go in a different direction.
Understanding their business model and how they earn profits can help you create a mutual win so that your vendor relationships are long term. Both parties need to have the same expectations in terms of quality and level of communication for there to be a successful business partnership.