Friday, 20 September 2013

5 Ways to Boost Vendor Management Strategy

5 Ways to Boost Vendor Management Strategy

Vendor management is a commonly overlooked aspect by many business directors and executives. As a start-up or inexperienced business owner, it is important to familiarize oneself with the process and strategy of vendor management.

So what is vendor management? Basically, vendor relationship management pertains to the ability to build a relationship with your distributors and manufacturers that will further empower both companies in a harmonious and mutual relationship for long-term growth and success. Vendor relationship management is not about dealing with suppliers or distributors with the cheapest possible price point. Vendor relationship management is consistently working with your vendors to come to a mutual agreement that benefits both parties involved. Below are 5 ways to boost the efficiency of vendor relationship management strategy.

First and foremost, shared data and objectives. The most essential success element of vendor relationship management is to disseminate data and priorities with your suppliers and merchants. This doesn't mean that you have to open wide the accounting books and give them accounts to your business systems. Correct implementation of vendor facilitation principles offer only the fundamental data at a timely approach, which will enable a merchant to better service your needs and demands. This may involve limited forecast data, new product releases, changes in design and broadening or moving changes, etc.

Second, even commitment and competition. One of the objectives of vendor facilitation strategy is to gain the loyalty of your suppliers in assistance and support towards your business operations. However, one should realize that this is a two-way process. While you're expecting loyalty and dedication from your suppliers, they are relatively expecting the same level of commitment from you and your business.

Third, enable key merchants to help you in strategizing. If a merchant supplies you with an important product or service for your business, you should invite the supplier or manufacturer to strategic gatherings or consult with him/her regarding the product or service they are delivering for your business.

Fourth, establish long-term solid partnerships. Vendor relationship management should aim for long-term rapport over short-term capital gains and marginal cost cutting. Avoid constantly changing suppliers and manufacturers just to save a couple of bucks here and there as this will cost more in the future and may affect quality.

Lastly, understand your merchant's business as well. Remember, the supplier or manufacturer is also in the business of making money as well. If you are constantly seeking cost cutting and savings from them, they may either lower the quality of products or services delivered or they may go out of business, two things you don't want to happen.

Author: Amir Sebahat
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