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Vendor Management

Who is more important to your business, your customers, or your vendors?

So many companies say the customer is the most important part of their business. If they didn’t have customers, they wouldn’t succeed, so they spent countless hours and dollars appeasing the customer. They offer customer appreciation days, guaranteed deliveries, special discounts because the customer asked, and the list goes on.

“The Customer is Always Right”.

I think we all know by now that is not true. But the customer is always the customer, so you focus much of your time to ensure that the customer has a good experience with your company. You want them to return, and use your products or services again. The end goal is to create a relationship in which both you and your customers are happy and profitable.

Guess what? You are a customer as well!

Many of us forget that, and therefore do not nearly spend as much time building our relationships with our vendors. If your “relationship” with a vendor is meeting them once per year to avoid a price increase, or beat them up for pricing, there is a good chance this is not a mutually beneficial relationship. Sooner or later, just like any bad relationship, one party will leave.

What do you want from your vendors? If you make a list, and compare it to what you think your customers want from you, it is probably very close to the same list. The question then remains; How do we get what we want? The answer is Vendor Management.

Vendor management should be a key component to any business plan.

A simple Google Search, or look in the business section of the local book store will show that there are hundreds of articles and books that can be found on the topic of vendor management.

The key concept is similar in all of these books and articles. Build Vendor Relationships

  • Be strategic. Short term goals result is short term relationships.

  • Focus on Win-Win agreements. As I mentioned already, you can’t build a relationship if every time you talk to the vendor you are beating them down on price.

  • Remember this is a partnership. You chose the vendor because they are the experts in what they do. Solicit their expertise by telling them what you want to achieve.

  • Hold them accountable. Just like you measure order fill and accuracy to your customers, measure the same for your vendors. Meet often to discuss opportunities for improvement. Consider a vendor scorecard, or report card. If you rate the vendor as an “A” in some areas and a “C” on another, they will want to improve. Also, if you continually have a vendor that scores below the average, do you really want them as a vendor?

Vendor Management is not a concept to be ignored. When done right, it is a mutually beneficial relationship that will result in stronger, more stable, more competitive companies. The end result is a better experience for your vendor, your company, and your customers.

That is Customer Service! Progress Demands Change


-Brian Munday

ASW Consultant

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