Vendor Management and Procurement Best Practices consist of a collection of vendor management best practices, techniques, tips, and tricks from some of the most highly-regarded procurement professionals in the industry. This guide covers everything you need to know about how to manage vendors for maximum benefit. How to prepare a single view of your entire vendor landscape that can be used for strategic planning, analysis and collaboration between multiple stakeholders across the organization?  How to align IT with business strategy through better vendor management?

Vendor Management can be very challenging and difficult, but it doesn’t have to be that way. In this guide, we will share actionable strategies on how you can manage your vendors better by leveraging technology. Vendor Management Best Practices provide a detailed description of how to manage vendors. The best practices are based on years of experience and expertise in technology, manufacturing and supply chain management serving as the foundation for partner relationships.

The Ultimate Guide to Best Practices in Vendor Management

A lot of companies feel like they’re wasting money, because they don’t really know how to control their vendors. A lot of the time, this kind of vendor management either ends up being too lax or too stringent; you might be throwing cash at contractors without seeing any results, or cutting them off from your business before they’ve even begun working with you. This Ultimate Guide to Best Practices in Vendor Management will help you understand what vendor management is all about, why it’s important, and how to make it work for your company.

Vendor Management Overview

Understanding vendor management best practices is a necessary first step in optimizing your supply chain performance. These are essential practices that will enable you to streamline operations, maximize efficiencies and minimize costs. Here’s an overview of vendor management best practices

Vendor Value Chain

The vendor value chain describes how vendors fit into a larger ecosystem. By understanding their role, you can approach vendor relationships more strategically. Vendor management isn’t just about choosing vendors and asking them for great deals—it’s also about aligning vendors with your company’s goals so that they support your business as much as possible.

Vendor Risk Mitigation Strategy

Your vendor risk mitigation strategy will serve as a bulwark between your organization and vulnerabilities due to vendor issues. Investing time into building out a sound strategy is key for successfully managing vendors, regardless of size or complexity. The key elements of a solid vendor risk mitigation strategy include

• vendor identification,
• assessment,
• engagement planning,
• policy development,
• monitoring
• remediation

 A comprehensive vendor risk mitigation strategy should be developed with an eye toward balancing two goals: ensuring compliance with legal requirements and industry standards while also considering both cost-effectiveness and effectiveness in mitigating risks associated with third-party vendors. Each of these components should be addressed in turn to build out a holistic plan that can be implemented effectively across your business operations.

Vendor Enabling Processes

From negotiating contracts, to monitoring performance and compliance, there are a number of vendor enabling processes that must be employed in order for your business goals to be accomplished on time and on budget. With all of these things going on, how can you ensure that your vendors aren’t creating any unnecessary burden? Here are some practices that we’ve found over our years of experience working with vendors will help keep everything running smoothly.

Vendor Budgeting, Sourcing, and Selection Processes

Get your vendors on board with you early. Talk to them about your plans, and lay out what you expect from them and what they can expect from you. Also, get as much information as possible about which vendors are right for you so that you have a clear picture of who’s out there. The more legwork you do up front, the smoother your Vendor Management Policy process will be.

All vendors need to follow your company’s guidelines for vendor delivery and governance processes. When you make these as easy as possible, your vendors are more likely to participate and deliver goods and services that meet—or exceed—your expectations. Here’s how to ease vendor operations with effective vendor management best practices it is important to ensure vendor performance through vendor performance management.

Vendor Delivery and Governance Processes

 You can do so by setting up clear standards of expectation; identifying key indicators; ensuring vendors have their own internal standards; and providing feedback when necessary. A single point of contact should be responsible for working with vendors on all aspects of their compliance program. In addition, it is important to have a process in place that monitors what vendors are doing right—and where they can improve.