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6 Keys to Success for Achieving Vendor Relationship Management Excellence

 

6 Keys to Success for Achieving Vendor Relationship Management Excellence

6 Keys to Success for Achieving Vendor Relationship Management Excellence - In a series of supply chains, the vendor is one of the factors determining the success of the company because, with the presence of a good vendor, the need for quality raw materials from the company can be met. 

To obtain materials in making a product, a company must not depend on just one source but must collaborate with several vendors to meet the company's needs so that it can produce shorter production times, competitive prices, and high quality which ultimately can increase customer satisfaction. 

The quality of cooperation between customer-vendor can be obtained by implementing an effective Vendor Relationship Management, which does not necessarily negotiate to get the lowest possible price. 

Vendor Relationship Management consistently invites customers or vendors to build long-term relationships with mutual commitment and mutual support to gain benefits and benefits for both parties. 

The concept of Vendor Relationship Management is useful for fostering good relationships with vendors to minimize problems that arise in the process of supplying raw materials. 

Other advantages that can be obtained by implementing Vendor Relationship Management are:

  • The efficiency of procurement costs
  • Reducing inventory costs
  • Improving procurement processes
  • Improving company performance

Several things affect the type of relationship with vendors, namely the length of time the collaboration will be built, how often communication is carried out, and how high the second level of trust both parties. Without trust, collaboration can't work well. There are 6 keys to success to achieve reliable Vendor Relationship Management:

Sharing Information And Priorities

The most influential key to success in Vendor Relationship Management is sharing information and priorities with vendors. This openness can provide benefits for the company. The information provided must be relevant to the company's business strategy and provided promptly so as not to lose momentum. 

Examples of information that can be provided are sales forecasts, plans for new product launches, design changes, company expansion plans. If this information can be provided to the vendor appropriately, then the vendor will be able to provide the best service in supporting the company's business.

Commitment and a Healthy Spirit of Competition

One of the goals of Vendor Relationship Management is to get a commitment from the vendors to help and support the company's business. On the other hand, vendors also need a commitment from the company. 

In this case, it does not mean that the company can accept whatever price is offered by the vendor. Companies must always compare incoming offers with competing vendors by adopting a healthy competitive spirit. Always get competitive bids!

Allowing Vendors to Assist the Company in Building Strategy

If the vendor supplying goods or services to the company is the main vendor, then invite the vendor to come to a strategic meeting related to its product or service regularly. Keep in mind that vendors are experts even more skilled than us in their fields and we can empower this expertise to provide input and creative ideas to companies to produce quality innovative products at low cost.

Building Long-term Cooperation

Vendor Relationship Management prioritizes long-term cooperation by placing vendors as strategic partners. The advantage of long-term cooperation is that it increases the quality of the products purchased, a high level of trust, and can transfer knowledge and expertise for the progress of the company.

Understanding the Vendor's Business

We must understand that vendors do business to gain profit. If we press prices too much and don't give them enough room to profit, then get ready for the company to be abandoned by the vendor. In Vendor 

Relationship Management, it is taught that companies are asked to help vendors to grow their business and be able to provide better services. The company can ask questions that can give an idea of ​​what it needs to be helped with so that the vendor can improve its performance.

Negotiation to Get Value

In Vendor Relationship Management, the rules apply that negotiations must be carried out in a good manner and the goals of both parties can be achieved. Not bokeh only benefits one party. 

Negotiations are more focused on getting value, which is not just the lowest price because often low prices can be achieved at the expense of quality. The specifications of the required quality must be stated in an agreement contract so that it can be clearly understood by both parties.

source: https://supplychainindonesia.com/

1 comment for " 6 Keys to Success for Achieving Vendor Relationship Management Excellence "

  1. This blog post cleared all my doubt,
    • Selecting vendors through researching, sourcing and seeking quotes
    • Contract negotiation comes next
    • Vendor Onboarding, which requires gathering documentation and information required to set up the vendor as an approved vendor for the company
    • Monitoring vendor performance
    • Monitoring and managing risk
    • Payment comes last.
    Found really cool Venwiz platform, It makes vendor discovery easy and makes the procurement process smooth.

    ReplyDelete