Business

Vendor Management – Getting the Most Out of Your Supply Chain

Many businesses rely very heavily on a third party of suppliers or vendors who either manufacture or supply products or extend services that ensure the smooth running of the business itself. A Pharmaceutical wholesaler is one such example. A wholesaler is in charge of supplying medicines and assorted medical products to hospitals and chemists. But he does not manufacture these products on his own. He has a number of vendors who provide him with the items. So, it becomes essential for the wholesaler to make sure the supply from his vendors is working like a well oiled machine. Certain factors, if not minutely monitored, can lead the business into disarray.

There are a few ways to achieve vendor management, namely Vendor Management Software and Strategic Supplier Management. These help to streamline the communications with the vendors, help manage a comprehensive and often confusing database of vendors and make the delivery process far more efficient. The Vendor Management Software is essentially a web-based program or application which helps to keep a watchful eye on the supply chain. This kind of software keeps records of all the current suppliers as well as those that have been a part of the supply chain in the past or those that will be in the future. This software typically consists of a registration process where the vendor can register, and an efficient approval process. It has a risk management feature. It also can track vendor performance. It also has functions like standard billing process as well as an invoicing process. It is user friendly, has various security features, a flexible report generating function and an after-sales support system. The software can be customized to suit the business’ individual needs. The Strategic Supplier Management is a consultancy firm that carries out all the above mentioned functions. This firm’s basic goal is to optimize the communication and the interaction between the vendors and the enterprise. To achieve this, the firm is responsible for increasing the efficiency in the processes related to procurement of goods or services, inventory management, purchase order management, etc. Using a Strategic Supplier Management firm not only reduces administrative burdens but also cost as the firm can get the best deals possible from the vendors.

But choosing a Strategic Supplier Management firm or a Strategic Partner should not be done blindly. When choosing a strategic partner one must pay attention to credentials. Financial stability, network proximity, references, experience all play a role in establishing the strategic partner’s reliability. Always have a clear idea of what your expectations are before you sign any contracts. Be sure you are also aware of any stipulations that the strategic partner has put forth so there is no confusion later on. One must also clearly define the targets and goals related to performance. And one must have annual reports that will allow for improvement.

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