Tag: vendor management in procurement

vendor management best practices

Vendor Management Best Practices: Reasons Why it’ll Help Companies Crush the Competition in 2019

Organizations all around the world have realized the fact that to compete successfully in the international market and to sustain their competitive advantage, they need to rely on effective supply chains and networks. This need to better manage supply chain has, therefore, caused a paradigm shift in the way most organizations function. Companies are now focusing on their core competencies and are roping in external suppliers and logistics providers who can ensure timely delivery of products and services to their customers. Hence, it becomes imperative for them to understand vendor management best practices and enhance collaboration with members constituting a part in the supply chain.

Additionally, following vendor management best practices helps bridge the gap between members of the supply chain and ensures deeper integration and collaboration among them. This ensures increased customer satisfaction, reduces costs, improves quality, and services from the vendor. A vendor management system also assures that a well-managed vendor will be quick to remedy the situation.

At SpendEdge, we understand the impact that following vendor management best practices can have on your business. Therefore, in this blog, we are highlighting some key advantages that companies should aim to achieve to establish a cost-effective vendor management process.

A productive vendor management policy is one of the vendor management best practices that can financially materialize the contribution of suppliers. Interested to know how? Request for a free demo below!

What is the purpose of vendor management best practices?

Improve quality and performance

Implementing vendor management best practices allows companies to manage vendor performance through target policies and governance structure. This increases the time required to market new features, services, or products by vendor governance, and the set of KPIs by focusing on service agility. Moreover, these practices help improve internal and external information flow between all stakeholders involved in the vendor management process.

Optimize cost

Formalizing vendor management best practices reduces the main business process outages and disruptions for companies and enables them to proactively address issues before they become problems. This helps companies to strengthen vendor relationships, work on existing contracts, and negotiate new ones without increasing the overhead costs.

Want to know how following vendor management best practices can result in cost reductions for companies?

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Protect the brand

Companies’ brands hold a significant value, and tarnishing it due to the actions of an unprofessional or unethical vendor can be a major disappointment. Following vendor management best practices can provide companies with vital information regarding suppliers and reduce the probability of any unforeseen risk.

Enhance value

Following vendor management best practices helps companies to elevate tier-one vendor relationships beyond basic negotiated commercial terms. Such collaborations result in synergies that deliver value to both the organization and the vendor. This improves the vendor management system and promotes the reselling of new products apart from enhancing the customer service experience for companies.

Still wondering how implementing vendor management best practices can benefit your organization? Get in touch with our experts below and know how devising a tailor-made vendor management policy can help you leverage all such benefits.  


4 Vendor Management Best Practices Automotive Industry Companies Must Follow

The automotive industry is undergoing a period of immense disruption like never seen before. Influenced by new manufacturing and procurement processes and innovative designs, neither vehicles nor auto manufacturing facilities look like how they did a decade ago. Automobile companies of today are facing challenges in effective category management, identifying and following vendor management best practices, and leveraging data and analytics for their benefit. Rapid innovations in the automotive industry are putting tremendous pressure on companies to look for vendors who are ready to evolve and innovate at a rapid pace. Therefore, automotive companies need better metrics for contract compliance, procurement ROI, process efficiency, contract life savings, and invoice accuracy to bring about best-in-class procurement and effective resource and vendor management capabilities.

At SpendEdge, we understand the impact that an effective vendor management system can have on your business. And to help automotive companies thrive in the competitive marketplace, our team of experts has highlighted four vendor management best practices that can help automotive industry players to become market leaders.



A Beginners Guide to Vendor Management and Ways to Tackle the Key Challenges

Vendor management today is not just about comparing prices and finding the supplier with the cheapest price for a product or service, it is ultimately about building better vendor relationships that will ultimately benefit both the parties. Vendor management process allows organizations to control costs, strengthen service, and reduce risk throughout outsourcing the processes to vendors while extracting the most value from the investment.

Vendor management process

For successful vendor management process, companies must take a strategic approach to build and maintain relationships with their best vendors. Good suppliers are hard to come by, so it’s important to nurture the relationships with the suppliers that companies don’t want to lose. Vendor management process is typically broken down into four main steps:

Establish business goals

Define the business goals clearly and be as specific as possible. In order to successfully undertake vendor management, you need to know exactly what it is that you’re trying to achieve. Vendor management becomes easier where there are pre- defined performance parameters to compare.

Choose the best vendor

Companies will have to weigh the pros and cons of different vendors. Some questions to ask here include: Does the vendor have extensive experience? Are they stable? Have they worked in similar environments? Do they have standardized processes and provide economies of scale?

Manage vendors

This is the routine activity of monitoring performance and output. It’s the best way to make sure that the terms of the contract are being fulfilled. This step involves extensive communication to offer approvals, disapprovals, feedback, changes, and everything that is necessary to deepen the relationship.

Consistently meet goals

Companies aim to consistently meet their goals over the course of their relationship with the vendor. This means managing the vendor regularly to better influence and meet performance objectives on a regular basis.

Whether you’re managing 10 vendors or 1,000, SpendEdge can help you radically simplify how you track, manage, and pay your vendors. Request a demo to know more.

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3 Key Vendor Management Challenges on the Cloud and Their Solutions That You Need to Know

The IT landscape of an organization has become more like a web with several vendors involved in the IT-enabled delivery of business solutions. With the increasing customer demands, vendors are proving to be crucial for enterprises. As the outsourcing duties in cloud computing are increasing, vendors are also taking on fundamental roles in enterprise operations. Additionally, with the increasing scope, complexity and scale of the relationships of vendors, the challenges associated with them have also expanded. Consequently, the importance of effective vendor management on the cloud has increased proportionately. In this article, we have discussed vendor management challenges on the cloud in detail to help you build the framework of a potential and successful long-term relationship with your vendors.


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Ask Me Anything: Everything You Need to Know About Vendor Management

What is vendor management?

It is a process that involves building better relationships with the vendors and actively creating, monitoring, and cultivating the documentation that underpins them to ensure that the business objectives of both parties are achieved. With the right vendor management skills, companies can control costs, drive service excellence, and mitigate risks to gain increased value from their vendors throughout the deal lifecycle.

SpendEdge’s vendor management solutions help clients in selecting the right vendors, categorizing them, determining the ideal number of vendors, mitigating vendor risks, and establishing a management organization that best fits the enterprise. Contact US

Vendor management best practices

Effectively managing the vendors involves the successful relationship between the client and the vendor so that both the parties concerned can benefit from it. Here are some of the vendor management best practices that to support a strong vendor relationship :

Promote regular communication

One of the most important vendor management best practices is to share information and priorities with your vendors. Communication with vendor need not always be face-to-face as virtual communications can easily be set up and used today. Regular communications ensure that the priorities of the buyer and the vendor are understood and adhered to. The primary objective of the meetings should be to drive accountability and monitor performance.

Use data to measure ROI

A company that possesses good vendor management skills will easily achieve increased sales, reduced costs, and improved efficiency. At the end of each campaign, project or milestone with different vendors, it isrequest proposal vital to quantify the impact they’ve had on the business. This helps companies to justify spend and allows to objectively decide whether or not to continue the engagement or search for a new vendor to meet their needs.

Align on value

The primary aim of a business should not always be limited to getting the lowest price. In many cases, low price could also mean low quality. Not compromising on the quality is one of the vendor management best practices that businesses must abide by as this could have a profound impact on the business. The key is for both the vendor and the client to align on what constitutes a good value. It is also essential to specify the quality details in the contract.

How to create an effective vendor management process?

Rightly managing the vendors is crucial to the economic well-being of a business. In order to streamline activities in the company, an effective structure must be established to manage the vendors. Some of the key steps involved in creating an effective vendor management process include:

  • Create a dedicated team for managing the vendors
  • Create a database of existing suppliers and vendors, and classify them based on the nature of their services
  • Implement vendor management strategies
  • Establish confidentiality of transactions

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3 Key Mistakes That You Must Avoid While Setting Up Your Vendor Management Process

The vendor management system is a very important and integral part of modern businesses. An effective vendor management process can facilitate automation in critical business practices, essentially terminating the need for tasks like invoicing, billing, and vendor metrics analysis. An effective vendor management system is essential to the everyday functions of most modern-day businesses. Therefore, any mistake made while selecting an appropriate vendor system can be detrimental and its eContact USffects can be seen throughout the business. In this article, we have highlighted three steps that you should avoid while implementing your vendor management process:

Know your business goals comprehensively

To implement a better and proper vendor system, you must prepare yourself ahead of time by understanding both short-term and long-term goals of your business. It is very important to know the objective of your business before choosing a vendor system provider. Businesses that choose their system providers prematurely often catch themselves in a bit of a rut when the vendor management process does not work or fit within their established workflow. This hinders workplace production.

Know the vendor system’s traitDemo

An effective vendor management process can help a business manage their payroll, time, invoicing, vendor billing, and provide thorough analytics across both mobile and desktop platforms. In today’s business world, the vendor system must have the ability to perform each of these tasks efficiently. It is very essential that your vendor system functions properly across all platforms to allow a seamless workflow. Additionally, detailed vendor analytics allow businesses to analyze their expenditure and profits on a per transaction basis, leaving room for further evaluation of vendor and business relations.

Implement your vendor management system appropriately

When you are ready to implement your new vendor system, ensure that it fits properly within your already established workflow. Also, pay extra attention and take special care of its implementation to ensure all services and functions are working effectively and properly. Additionally, ensure that you have a clear roadmap for its implementation and strong technical support.

An effective vendor management system is very essential for businesses to drive service excellence, control costs and mitigate risks. We at SpendEdge, believe that smart vendor management system can help businesses fetch an increased value from their vendors throughout the deal lifecycle. To know more request free proposal below.

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4 Vendor Management Best Practices That You Must Know

Vendor management is gradually becoming one of the core competencies for successful enterprises. It is a critical element for businesses to build a relationship with their suppliers and service providers and will consequently strengthen their businesses. Furthermore, selecting the right vendors is often critical to any company’s success. Bad vendor management systems and disorganized relationships can result in performance interruptions and even ruined reputations. Therefore, the need to adopt vendor management best practices comes into the picture. Let’s examine some of the vendor management best practices that will help organizations create a mutually beneficial relationship and advance the organization’s goals. 

 Vendor Management Best Practices

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#1. Carefully examine the options

Some industries might have only a handful of vendors to choose from. However, in most cases, there is no shortage of market competition and it is important for companies to do their homework before making their decision. Businesses must first assess their needs and narrow down potential vendors based on the pertinent criteria. Carefully examining the options is one of the vital vendor management best practices for companies. Some companies may require multiple vendors to fulfill their needs, but consolidation reduces confusion and will likely allow for cost savings.
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#2. Balance commitment and competition

One of the key aims of having a vendor management system is to gain the commitment of the vendors to assist and support the business operations. On the other hand, the vendor tends to expect a certain level of commitment from the company. It does not enterprises must blindly accept the prices they set. One of the key vendor management best practices is to gain competitive bids.

#3. Provide insights on current and future trends

Vendors and organizations depend on each other to thrive in the market. Therefore, providing insights on current and future trends is one of the key vendor management best practices. Companies must analyze their vendors’ experience with other companies, have an in-depth knowledge of the industry, and use these as inputs while strategizing and optimizing the vendor management system. Moreover, vendors manage multiple clients and companies haven’t built rapport with their point of contact, chances are that they could miss out on new developments. As vendors evolve and add more services, capabilities, or offerings organizations have to be aware of what’s new in the market. Vendors must be informed that the company wants to be included on these types of announcements.request proposal

#4. Share information and priorities

One of the most important vendor management best practices is to share information and priorities with the vendors. Vendor management best practices provide only the necessary information that is required for the vendor to serve your needs better. It may include new product launches, limited forecast information, and changes in design and expansion or relocation changes.

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