Business service suppliers are a core resource for many businesses. A vendor's services or products may constitute a major part of a firm's operations. A successful vendor management strategy aims for a win-win business relationship. There are a number vendor management practices to help management achieve this mutually beneficial business-to-business relationship with providers of outsourced supplies and products.
Do not be afraid to ask questions about vendor operations that are relevant to your firm's operations. This helps you to better understand your own business operations. Vendor insights can be especially helpful when a firm seeks to develop strategic goals and considers new products and services.
Supplier services can be either short-term or long-term. Rapid changes in vendor services intended simply to gain short-term cost savings can ultimately translate into higher costs. Building a solid alliance with vendors achieves intangible benefits. For instance, your firm's vendor may be an expert in its service or product area. The trust built over time can ultimately translate into a freer exchange of expert industry know-how, creating a competitive advantage for both firms.
While business commitment is important, it is also equally important to establish a line for competitive bidding for vendor services and products. This encourages existing vendors to provide your firm with prices, products and services that are market-competitive. Competition is a natural incentive to vendors to produce more efficiently.
Clearly shared expectations and priorities help vendors to effectively deliver services and products to specification. This includes communicating changes that may affect the services and supplies provided by the vendor. Also, share industry forecast information relevant to the service or product provided by the vendor. This information helps it understand its role in your operations and may help it to better deliver its services and products.
Provide evaluation reviews for vendors that measure performance at predetermined landmarks in the service process. This is a core tool of vendor contract management. It provides a business assurance that vendors are performing tasks and activities in a timely manner that ultimately leads to achieve threshold business objectives.