Working with the right vendors mean happy customers and smooth operations, while working with vendors that cannot be depended upon results in problems and turmoil. Thus, any business that wants to deliver consistency to their customers will need vendors which deliver it consistency.

What is vendor management?

Vendor management helps the organization improve the service it receives from vendors, while reducing the risks associated with the business relationship. When the management of vendors is done manually the organization loses many of the benefits that were identified in the vendors during their selection or negotiated when the purchase commitment was made. A problem that organizations often face is having the vendor registered in multiple databases with different information, so it is impossible to clearly understand their real performance and the type of relationship that is carried out with them.

Each vendor must be registered only once in a database, with a profile where they can know their skills and performance. A section of this profile must be maintained directly by the vendor and the vendor must be able to identify opportunely their performance improvement opportunities.

The advantages of a vendor management system

Maintaining strict control over the vendors that the company uses reduces the risk of working with vendors that expose the company to breaches of service, quality or legal. When a single formal authorization process is used, this possibility is radically reduced. Using a vendor management software to manage every aspect of vendors allows businesses to achieve higher efficiency and productivity.

Remember that the authorization to work with a vendor is generally a multifunctional process. Being clear about the participants in each type of evaluation will streamline the vendor management system. It is highly recommended that the vendor management software saves the documents that were used in the evaluation process, so that the evidence used is recorded and can be validated whenever needed.

Under certain predefined rules, the documents may also be permanently updated by the vendor, to keep up-to-date relevant evidences that may be required by the final clients or regulatory entities. This reduces the risk of working with vendors with expired permits or registrations.

Here is What Our Solution Can Do For You

Want to know more about the powerful features of the Predict360 Vendor Management System and how they can help your business? We have created a quick checklist of the features, so you can see how our system improves vendor performance and lowers vendor risk.

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Obviously, these processes make the initial discharge a bit slow and even bureaucratic, but the level of risk that is reduced and the subsequent benefits for the company and the commercial relationship itself far outweigh the initial inconvenience.

The control of the relationship with the vendor is essential to manage the relationship and take it to the level of a business partner that is characterized by sharing information and building a new culture that allows the development of joint projects.

Vendor management for small businesses

The relationship between vendors and small businesses has three phases. The initial phase is characterized by the discovery of the needs of each of the participants, based on the mutual visit of the facilities, the presentation and sharing of the basic information of the operation. The fundamental objective of this phase is to understand if it is worth taking the relationship to another level.

The second phase, called experimentation, is where you begin to apply problem solving activities based on the basic mapping of the supply chains of each of them and the identification of small, low-risk mutual problems that can be solved. be resolved in a short time. We consider that this phase serves to evaluate the capacity of organizations to work for common objectives.

The relationship begins to intensify in phase 3, where the parties openly discuss their problems and begin to carry out activities where costs are shared, and administrative processes are facilitated. When the three previous stages work properly, an integration stage can be reached, where the parties recognize the special relationship that exists between them, openly share financial information and integrate some business processes, sharing some assets.

The fifth phase is that of partnership – where and where joint research and development projects are finally carried out that require sharing resources in multiple types and building a common vision of the final project.

Keep in mind one of the most valuable resources of the professional in supply is its portfolio of vendors, which is why it is necessary to dedicate all available resources to improve this process and maximize the contributions that vendors can give to the organization. If you want to see what a vendor management system can do for your business, then our team will be glad to show you. Get in touch with us for a demo of Predict360.