A vendor for uniforms, a vendor for cleaning, another for mechanical services, and a few others for exterior maintenance and trade services. For many businesses, vendors play a key role in day to day success, but managing multiple vendors can be overwhelming, so it’s important to maintain a good line of communication with all of your vendors. This will also help with preparing your business for contingencies. When managing multiple vendors, follow these helpful tips to build a strong business relationship and ensure you’re getting the greatest value out of their services:
1. Understand the costs of your vendors and the value they provide
When you initially signed the contract with any of your vendors, you should have taken the time to fully understand the agreed upon services in the contract. If you’re unsure of the terms, make sure your re-read them. You don’t want to pay for services you aren’t using, and you want to make sure the services you do use are being used to their fullest potential. Check for auto-renewal dates and double check for hidden fees like service charge increases. If you don’t understand the core value provided by the service, the supplier can’t properly be evaluated.
2. Communicate to avoid mistakes
One of the best practices for vendor management is communication. Communication is key to avoiding mistakes and acting on contingencies, so you should always be sharing critical information. You can’t just assume that your vendor will know the ins and outs of your business. Make sure you have a dedicated point of contact for your vendors, whether it’s through a vendor portal or an appointed individual. It’s your job to make sure they understand the processes that are relevant to the services they provide and to let them know when you need additional services.
3. Establish your business’s priorities with vendors
You should always be sure that your vendor rep understands your business’s needs and priorities. If vendors understand your expectations, this makes managing them easier during times of increased business. Make sure that you’re always providing your vendor with information such as times when your business requires an increase in the amount of service or supplies (ex: product launches, change in processes, expansion).
4. Work with vendors to help strategize services
If certain vendors are key to the services you provide, allow your service rep to provide input on your strategic planning on processes relating to their service. Quality vendors are experts at what they do, so using their help and experience can be an invaluable resource for your business. Using your vendor’s knowledge should give you ideas on how their services can provide the most benefit for your business.
5. Establish long term partnerships
Constantly changing vendors will cost you time and money. That’s why it’s important to find a vendor you can trust and then build on that relationship. While you may be able to jump from vendor to vendor for short term gains like cost savings, developing a long term partnership will provide your business with better quality services and preferential treatment.
6. Monitor your vendor’s performance
You should be keeping account of the money spent and the services provided by each of your vendors. While you may be happy with your initial vendor program, you should be keeping track of of how well your vendor is meeting their contract terms. Make sure your vendor consistently provides quality services, corrects issues in a timely manner, meets delivery times, and is available and able to help during business emergencies.
7. Plan for contingencies and everyday exceptions
Contingencies in business processes can cause major issues if they’re not planned for proactively. Make sure you plan ahead with all of your vendors by letting them know how certain emergencies and situations need to be handled. Whether it means getting additional supplies before a natural disaster or planning on how to deal with mechanical breakdowns and emergency repairs, letting your vendor know how to handle these situations ahead of time will save you from stressful situations down the road.
Maintaining Good Vendor Management Practices
Managing your vendors is an ongoing process. The more you communicate with you vendors and the longer your partnerships last, the greater value you’ll get from their services. Each vendor will typically provide you a dedicated rep, and you should develop a positive relationship with this person. Make sure you provide them with a direct point of contact on your end. By nurturing better partnerships with your vendors and knowing you can count on them to provide the services you need, you’ll be able to focus more on your own work.