Resolving Conflicts With Vendors

Resolving conflicts with vendors typically involves establishing an agreement on desired performance, monitoring services and determining the quality and value of the results. Conflicts typically arise when you don’t have a shared understanding of objectives and expectations. By establishing a clear statement of work, you define the work to be performed. To avoid future conflicts, create incentives and penalties to improve the vendor's performance. By establishing a collaborative relationship, you can manage vendors more effectively.

To resolve a conflict with a vendor, start by understanding the problem. Meet with the vendor in person to discuss some of the issues. Use active listening skills, such as restating, paraphrasing and summarizing, to get details and show that you understand the vendor’s point of view. Identify the problem in specific terms of missed deadlines, poor quality or insufficient service. For example, if you have hired a vendor to clean your facility, but your employees report that the bathrooms are consistently dirty, gather information from employees to verify the scope of the problem, then share this information with the vendor.

Before you can resolve a problem, you and the vendor must agree that a problem exists. This helps you get started working on a mutually acceptable solution. It is important to obtain agreement from the vendor that he will work with you to resolve the situation. Discuss possible causes and brainstorm possible solutions. You might need to acknowledge unforeseen issues. For example, the vendor may cite personnel training issues and request more time to resolve the problem. Ask the vendor to describe specific actions he might to take to remedy this problem. To move from an adversarial working relationship to a more productive one, you must agree upon your shared goals, review process and resolution process. To ensure that vendors meet their service level agreements, set expectations up front before disputes occur.

Once you and the vendor fully understand the problem, you can negotiate a resolution that meets both of your needs. Solutions might include a refund or other compensation for services or products not delivered in an adequate manner. You might also need change the way work gets done. For example, if your supplier fails to keep bathrooms clean at your facility, consider changing the cleaning schedule. You might also need to challenge the vendor to expand his services if you have added more employees, customers or events at your facility.

By addressing the issues, identifying the necessary improvements and setting expectations to eliminate future problems with your vendor, you can resolve disputes in a constructive manner. If you can’t resolve the problem, terminate the contract or engage a third party to help you resolve your grievances and avoid subsequent problems. In some cases you might need to file a complaint with the Better Business Bureau or a government agency that oversees your industry.