Companies that fail to invest in vendor relationship management to analyze risks and prevent failures in the first place lose sales, revenue, and market value.
J.M. Smuckers’ Brand failed to invest in vendor management, effective risk assessment, and proper vendor diligence. The result was a failed product and customers’ trust, which caused them a loss of $400 million in the market value.
Why do you think it happened? Because of the failed vendor management process. We often think collaboration, knowing vendors, and strengthening relationships do not affect the business whatsoever. However, it helps to know more about vendors and ensure they deliver quality products and mitigate risks.
Vendor management is crucial, but all vendors are not the same. They may have different requirements and might follow diverse processes. Hence, traditional vendor relationship management practices won’t be effective. To strengthen vendor relationships, you need to implement a modern and technology-oriented approach.
You need to devise a strategy for managing vendors by considering everything buyers and sellers, products and services, and more.
This article takes you through the aspects you need to consider on the road to better vendor management. It explains the vendor management process, modern approaches, and tools to improve vendor relationships and provide better long-term opportunities.
What is Multi-Vendor Management?
Multi-vendor management is exactly what it sounds like, managing multiple vendors – from selecting the right vendors to outsourcing, gauging quality, evaluating performance, and ensuring on-time payments. When done effectively, it improves communication, streamlines processes, enhances collaboration, and strengthens relationships with vendors on an individual level.
Nowadays, it’s done using vendor management tools and technologies such as a vendor management portal, which automates processes and streamlines operations with a centralized interface.
Note: Often, businesses misinterpret vendors and suppliers. They use it interchangeably. But vendors are those who supply goods and services to customers, whereas suppliers supply to businesses. Suppliers are the first link in the supply chain, while vendors are the last in the chain. So, while looking for a vendor management portal, make what you require clear.