A well-managed vendor relationship will result in increased customer satisfaction, reduced costs, better quality, and better service from the vendor. When and if problems arise, rest assured that a well-managed vendor will be quick to remedy the situation.

The time, money and energy used to nurture a positive vendor relationship cannot be measured directly against the company’s bottom line.

The vendor selection process can be a very complicated and emotional undertaking if you don’t know how to approach it from the very start. There is a need to analyze your business requirements, search for prospective vendors, lead the team in selecting the winning vendor and successfully negotiate a contract while avoiding contract negotiation mistakes.

Depending upon the size of the possible contract, they will pull out all the stops in order to get your business. This may include a barrage of overzealous salespeople and “consultants”. Just because they send a lot of people in the beginning, doesn’t mean they will be there after the contract is signed.

The bottom line in vendor management best practices is: communication, communication, communication.

KEY TAKEAWAYS:

• The vendor management process begins by selecting the right vendor for the right reasons.
• Once you start to look at individual vendors, be careful that you don’t get blinded by the “glitz and sizzle.”
• Be wary of restrictive or exclusive relationships.

“If an issue is small and insignificant to you but the vendor insists on adding it to the contract you may choose to bend in this situation. This shows good faith on your part and your willingness to work towards a contract that is mutually beneficial to both parties.”