Women In Business

5 key steps to manage vendor and supplier relationships

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For the most part, driving your business towards success only requires you to focus on your company. However, to make sure all your operations run as smoothly as possible, it’s also important to look to the other businesses you depend on. When you put more resources into vendor management, it will help to build strong and mutually beneficial relationships with your suppliers and service providers.

Despite what you may think, vendor management isn’t as simple as negotiating for the lowest price. It’s more a constant state of collaboration between you and your vendor, which both companies come out better for. Here’s some of our best advice on maintaining brilliant vendor relationships.

Be clear

First of all, make sure to explain your specific goals at the start of any relationship with a new vendor. You’re never going to have a beneficial partnership with this company if they’re not aware of your business vision, goals, and your expectations. Let’s say you founded your business with a massive emphasis on customer service. Getting the importance of this goal across in the early stages will encourage your partner to devote more resources to improving their customer service.

Obviously, there’s only so much you can say to a CEO to try and sway the way they run things. However, telling them about your goals and how important they are to you is a great way to start off any trade relationship. If their company is relatively new, then they’ll probably be eager to put a smile on your face, so make sure you don’t brush over this.

Appoint a relationship manager

As soon as that first partnership is made official, you need to assign a dedicated manager for each vendor relationship. Pick out some of your best project managers and team leaders, and assign them to the various vendors which they can keep track of. Set these managers a schedule of visiting your vendors’ sites or calling their higher-ups. This will get you some feedback on the way the partnership is going. When I say site visits and phone calls, I mean site visits and phone calls. Hearing someone’s voice is much more personal than simply receiving an email from them.

It can also be more memorable if you want to pass on any suggestions to your vendor. Aside from that, having someone visit the site in person will do even more to strengthen your vendor’s confidence in the relationship. Letting them know you consider them an important part of your team is a general habit which you should always be coming back to. Most importantly of all, you need to make sure the manager is responding to any vendor concerns and queries as quickly as possible, and keep all lines of communication very fluent. If you don’t have enough trustworthy managers to assign one to each vendor, then you may want to consider some contract management software to smooth things out.

Communication

Okay, I know I just told you to reach out with physical visits and phone calls over emails. However, it’s still very important to have certain things in writing when it comes to managing your vendor relationships. This is mainly insurance against any mishaps or malpractices that could spring up in the future. With things like your projected sales volume, best practices, payment receipts and so on, it’s always good to have it archived in writing somewhere. It’s great to start a discussion off with a phone call, and some approachable verbal communication.

After this though, it’s highly recommended that you follow your conversation and any agreements up with an email. This will give you something to fall back on if your vendor comes up short. However, it will also reduce the chances of miscommunications and misinterpretations. Set everything out clearly, and you’ll be able to steer clear of all kinds of vendor relationship issues.

Progress reports

As part of this emphasis on clarity, you should also be asking your vendors for regular and in-depth progress reports from all your vendors. When you ask for that first one, be very clear in the figures and metrics you want included. This will give you much better insight into how the vendor’s business is doing, and will show you any major glitches or problems straight away. With this kind of foresight, it will be much easier for you to stamp out problems straight away rather than them getting out of hand. Sure, it’s certainly important to keep close tabs on what your vendors are doing and what you’re due to gain from them. However, it’s also extremely important to maintain a certain level of respect for the vendor’s resources and time.

If there are any delays in your work, or you want to make sudden, last-minute changes to a plan, then it can seriously affect your vendor’s bottom line. This will put an unnecessary strain on your professional relationship. At the very least, you should be paying on time. There seems to be a culture of “flexibility” among western start-ups that leads to payments being put off over and over. If you seriously can’t meet the payment date, then make sure you’re able to give your vendors a good explanation, and reschedule the payment immediately.

Loyalty

Finally, show some degree of loyalty. A sense of loyalty is the big, missing ingredient from a lot of potentially great business partnerships. If you can foster this kind of feeling between you and your vendor, you’ll have very little else to worry about! Pushing new business their way wherever possible is a great way to show them how loyal you are. If there are any mistakes or miscommunications that cost you both money, don’t simply point a finger at your partner and leave them to clean up the mess they’ve created.

Instead, offer them support out of your own resources, and show that their business is as important to you as your own. In the future, when you run into trouble and need the same kind of support, your vendor will be there to help. At the very least, they’ll be more likely to offer you discounts and other incentives!

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