Why do so many companies think that vendor management is not important, or, that it’s a role that anyone can perform as long as they are somewhat educated. Don’t downplay this role! It takes a qualified, experienced vendor manager resource to manage a strategic vendor successfully, especially if this vendor is providing a service or product that is critical to the company’s day to day business. Throughout my procurement career, I noticed that companies, both public and private, put so much time and effort into developing contracts only to have them e-filed in a database until they either expire or an issue arises. The contract is the beginning of the partnership between you and your vendor so it’s important to make sure that you lay the foundation and framework for managing that partnership from day one and that it’s clearly articulated in your contract. Having a good relationship with your vendor, will allow you to always get the best outcomes for your company over the term of the contract.
What do Vendor Managers do?
Vendor Managers manage the relationship, look for ways to improve and ensure that both stakeholders and vendor remain positive. They resolve issues as they arise, nipping them in the bud so to speak, before they become critical and get escalated. They know the terms of the contract and work closely with a Contract Manager, if there is one.
Where are Vendor Managers Located?
Vendor managers are typically found in the procurement department but I’ve also seen them sit within the line of business. It really depends on the structure of the organization. They look at the strategic side of the relationship and try to leverage their supplier for other products/services thus limiting the number of vendors and saving their company money.
How to Manage Strategic Vendors?
So, here’s a couple of examples on how to manage your vendor; conduct monthly vendor meetings to discuss performance or operational issues and review monthly service level dashboards. Dashboards, by the way, should be delivered to you by your vendor as agreed upon by both parties and as outlined in your contract. This is particularly crucial for IT services as you will want to know how many service levels were missed and the frequency. If there are multiple stakeholders, having those stakeholders present at these meetings is also important. Conduct quarterly business review meetings (QBR) and present the outcomes to your CIO or President. Develop a scorecard and reach out to end users to get the scoop on the product/service. This keeps stakeholders happy and performance running smooth.
I hope you found this article helpful! Feel free to contact me for a free 15 minute consultation regarding this article and stay tuned for the next supply chain topic by Procurement Management Services Inc.
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