Vendor management allows you to build a relationship with your suppliers and service providers that will strengthen both businesses. Vendor management is not negotiating the lowest price possible but constantly working with your vendors to come to agreements that will mutually benefit both companies.

Appropriate vendor management practices provide only the necessary information at the right time to allow a vendor to better serve your needs. This may include limited forecast information, new product launches, changes in design and expansion or relocation changes.

Vendor management prioritizes long term relationships over short term gains and marginal cost savings. Constantly changing vendors in order to save a penny here or there will cost more money in the long run and will impact quality. Other benefits of a long term relationship include trust, preferential treatment and access to insider or expert knowledge.

Part of vendor management is to contribute knowledge or resources that may help the vendor better serve you. Asking questions of your vendors will help you understand their side of the business and build a better relationship between the two of you.

KEY TAKEAWAYS:

• One of the goals in vendor management is to gain the commitment of your vendors to assist and support the operations of your business.
• If a vendor supplies a key part or service to your operation, invite that vendor to strategic meetings that involve the product they work with.
• Remember, your vendor is in business to make money too. If you are constantly leaning on them to cut costs, quality will suffer, or they will go out of business.

“The key to succeeding in vendor management is to share information and priorities with your vendors. That does not mean that you throw open the accounting books and give them user IDs and passwords to your systems.”

Original Source: https://www.thebalance.com/vendor-management-success-tips-2533810