Understanding the Cornerstones of Vendor Management

There is much written and said about successful vendor management. However very little concerns the fundamental cornerstones of sound vendor management.
The below listed cornerstones, though ridiculously obvious, are frequently ignored and if, are the root cause of many supplier and internal stakeholder disputes that often have far reaching and bitter consequences.

1) Vendor Due Diligence: Should include careful research into key aspects of potential vendors such as ownership, business longevity, financial, quality and customer service history. Also, of interest is client profiling and possibly contacting these for reference purposes.
2) Vendor Management Policy: Such a policy document should exist, as it provides the framework for vendor selection and relationship governance. Ensure that you know its contents. This policy document ought to be frequently revised to reflect and guide your organisation’s current and near future interactions with its vendor base. Follow it!!
3) Stakeholder Compliance: Ensure whatever internal and multiple stake holders you are buying for, agree with you, concerning quality, availability, delivery, price etc. Always ensure that this stakeholder compliance is unambiguous and in writing and this relationship is managed on an ongoing process.
4) Specification criteria: Ensure these are clearly detailed and outlined from the outset and all parties, yourself included, understand, and acknowledge them. ENSURE these are in writing (from all internal stakeholders) and clearly and traceably communicated to all relevant parties on both sides of the bargaining table.
5) Ethics Policy: Often considered non- relevant, it is vital such a policy exists, is adhered to, and frequently reviewed and updated.
6) Multiple Suppliers: Also known as supply base tiering, it’s a crucial strategy often overlooked. Wherever feasible, when researching new product sources, ensure what multiple sources of supply exist for that product. Understand how and why this strategy works to your benefit and employ it!
7) Contracts: Always ensure that all key factors relating to goods and services supply are clearly stipulated in the supply contract. Key factors centre on pricing, quality, lead-times, and contract duration etc, but anything else pertinent no matter how minor deserves to be included. Ensure that the contract is legally sustainable (interact with your legal support team) from the drafting process onwards.
8) Vendor Performance Audits: Supplier performance impacts directly on operational procurement performance as well as your own. Therefore, supplier performance needs to be regularly reviewed, and adjusted. These should be generically frame worked by the Vendor Management Policy.
I offer pro bono basic advice and articles to professionals within SME’s, Corporates and State Enterprise alike, and provide more formalised billable consulting recommendations and implemented solutions as a consulting Procurement specialist. Regards any questions regarding the above content, please reach out to me for further insight or clarification.