With digitization being the driving force behind the mode of operation in the global marketplace, strategies to conduct procurement operations for B2B companies have evolved with days. In modern times, procurement operations are conducted with the aim of getting the desired results within a limited time. Gone are the days, when procurement teams in B2B companies had to undergo the cumbersome tasks of vendor evaluation by requesting quotations and going back and forth with companies for negotiation.
In today’s digital world, the task of vendor evaluation is sized down to searching desired products from catalogs and set prices with vendors all on a single digital platform. However, such innovation surely ensures convenience and lesser time in the procurement operations, but does it guarantee an adequate vendor evaluation for B2B companies? The answer is mostly no.
To develop an effective vendor evaluation process B2B companies require to analyze new and existing vendors. Request a free demo to know how our experts can help you with real-time insights pertaining to vendors in different industries.
To cater to consumer’s evolving needs that range between high-quality services and personalization, a majority of B2B companies are prioritizing proper scrutiny of vendors in their procurement operations. In the long run, such careful vendor evaluation will not only facilitate them with a satisfied customer base but will also usher a streamlined procurement operation.
Top 5 Tricks for Effective Vendor Evaluation to Streamline Procurement Operations for B2B Companies
Engage with vendors who offer a high level of technological expertise- Rapid advances in technologies such as VR, AI, and AR offer immense opportunities for the creation of unique campaigns to engage with prospective customers. This makes it an essential vendor evaluation criterion for B2B companies to evaluate vendors’ technological capabilities and the cost of implementing technologies before engagement.
Setting clear performance benchmarks– It is essential to set a baseline against which the performance of vendors can be benchmarked along with setting measurable/quantifiable KPIs. The ideal way to start the process is to ask vendors to assess the area to which they are supposed to cater to. They should also present a report regarding the services that will be provided and the improvements that can be expected. This can be the baseline for effective vendor evaluation. Defining KPIs in SLAs provides vendors with clarity on the scope. Besides setting standards for operations, pricing, and performance, KPIs must provide tangible goals in terms of the quality of service. The adoption of such practices can enable buyers to accurately gauge service quality, carry out measures, and suggest measures to improve the quality of services
Engage with vendors who prepare comprehensive purchase orders- Purchase orders should include delivery schedules, quantities, the total price of products ordered, and minimum purchase requirements (if any). It should also include indirect costs such as packaging and labeling costs. These details provide buyers clarity on all the relevant costs, facilitating price negotiation with vendors.
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Promote competitive bidding scenarios- One of the most effective strategies for vendor evaluation is to engage in competitive bidding. This involves the invitation of bids from multiple vendors. They can be evaluated based on parameters such as flexibility in pricing terms, value additions, financial strength, reputation, and geographic presence. This will enable buyers to assess the overall capability of the available supply pool and choose a supplier that is best suited to meet their requirements
Engage in consortium purchasing practices– A purchasing consortium comprises two or more buyers, usually belonging to the same geographic location. They collaborate to consolidate their procurement requirements. Such a consortium enables buyers to consolidate their procurement volume, which offers them higher bargaining power over their vendors during procurement negotiations. Buyers can also reduce their transportation, logistics, and warehousing costs by procuring products as a consortium.
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