Your suppliers comprise a key component to your success. You can’t run a product-driven business or a service-oriented business without positive vendor relationships. That’s why vendor management really means relationship management. It can present challenges, but effective management results in a stronger business.
Business Relationships Importance
Your vendors are actually your partners; they just don’t own stock in your firm. You need to build loyalty and trust with them. Discuss your processes and products with them. When they voice concerns, listen. Another way to build trust is to pay in a timely fashion. This communicates your reliability. If you think you might pay late, call and discuss it first. Vendors appreciate this transparency. Honest communication helps foster a stronger relationship.
Write detailed agreements that codify all of the needed information including communication and delivery terms, an item description, payment terms and price. Have both parties read and sign it to reduce confusion.
Check their references and business history. Ask for their crisis response plan. Research their ability to fill your orders. Rather than choosing the cheapest, choose the most fitting vendor.
To simplify all of the needs to build a positive relationship, use a technology solution. A vendor relationship management program lets you track vendor contact information, purchases, and purchase orders. This helps you document your processes and keep immaculate records.
Challenges and Solutions
Compliance with sole source agreements or contract suppliers can challenge larger firms. A procurement software like PurchaseControl can help track such agreements and stop purchases that would violate contracts. It also helps address the challenge of poor spending visibility which refers to incomplete data that doesn’t accurately represent how much is spent per vendor or what was purchased. You can also improve workflows through automation in a procurement software.
Another challenge to business is simply tracking the growing number of vendors an organization uses. That contributes to the need for a management software solution. One such solution, BipSync, provides a full-service solution which negates the challenge of ad-hoc piecemeal addons to problem solve and patch issues. With it, you can automate workflows, coordinate processes, define processes for diligence, procurement and renewals and conduct supplier communication including contract renewals.
Doing business in a rut presents another challenge. If for years you’ve been using the same vendors without re-evaluating the agreement, you can improve your agreements, bottom line, and costs by re-evaluating them. You can build strong vendor relationships that become partnerships. Technology can help you develop an integrated system that lets you manage relationships via the cloud. Call Starr & Associates today to learn how we can help you integrate software that lets you take control of supply orders, tracking, payments, sole source agreements, contracts and supplier contacts.