As discussed in previous articles, there are various roles throughout a procurement team. While each role serves a specific function – they are all independently crucial to the overall success of the procurement team. Vendor management is an essential function of the procurement department, and is multifaceted in nature.
HCM Works defines vendor management as,
“The term vendor management is used when describing the activities included in researching and sourcing vendors, obtaining quotes with pricing, capabilities, turnaround times, and quality of work, negotiating contracts, managing relationships, assigning jobs, evaluating performance, and ensuring payments are made. It requires a lot of skills, resources, and time.”
As demonstrated by the above definition, vendor management takes a dedicated professional, or team of professionals. Having an idea of the industry standards and best practices related to vendor management will put your vendor management team ahead of the pack.
Jumping Into Vendor Management Best Practices
Adhering to best-practices and industry standards is a good way to make sure that processes and procedures are continuously updated. This is also a good strategy to maintain a competitive edge, and keep up with shifting industry and consumer priorities.
At the heart of vendor management practices are vendor and supplier relationships. The act of building, developing, and maintaining vendor and supplier relationships happens through a series of processes and touchpoints. These touch points collectively make up the supplier relationship, and consist of communications involved in requests, reverse auctions, onboarding, contract management, and contract expirations/renewals.
All of these various touch points need to be handled with care, managed, and properly documented. Leading to some of the essential best practices and industry standards of vendor management.
Procurement software, like that offered by ProcurePort, is taking the industry by storm. The many benefits of implementing procurement software solutions into a procurement department simply outweigh the upfront cost and time it takes to integrate.
The technology is innovative, intuitive, and user-friendly. Amplifying employee production, and efficiency, and freeing up auxiliary time to focus on other value-adding activities.
Some of the processes that procurement software can help streamline, or even automate include the request for proposal and request for bid processes. Not to mention, the reverse auction function.
An additional functionality of the procurement software is the ability to sift through vendors and suppliers to create the best supplier-pool possible. This occurs through various information gathering tactics that can all be automated with procurement software.
With the many benefits that procurement software brings to the table, it’s only logical that it’s so swiftly becoming an industry standard and best practice.
Setting Expectations and Standards
As mentioned earlier, the vendor and supplier relationships are truly the heart of vendor management processes and departments. One major element to creating strong supplier and vendor relationships that lead to long-lasting and mutually beneficial contracts is being clear and upfront about needs and wants on bids.
Creating a very clear contract for suppliers ensures that they know what they’re getting into, and allows them to prepare the necessary resources to meet the demands and stipulations of the contract. Ensuring that both suppliers and buyers are satisfied through the duration of the contract is vital to building long-term relationships that can last over a variety of contracts for years to come.
Solve Short-Term and Long-Term Needs
A seasoned procurement professional or vendor manager will know, procurement teams have a mixed bag of both short-term, and long-term needs. One goal of procurement technology and e-procurement solutions is to eliminate, or at least greatly reduce the amount of short-term buys that are performed by the procurement team. However, there’s no eliminating these altogether.
Being aware and having processes in place for both long-term bids, and short-term buys is an important part to meeting all of the needs and demands a procurement faces in a daily and monthly time frame.
A Final Thought
Vendor management and procurement software truly go hand-in-hand. To explore vendor management and other e-procurement solutions, visit ProcurePort today, and start building your business’s series of custom procurement solutions. ProcurePort is the premier destination for procurement professionals looking for knowledge and information on everything procurement. From software solutions, to procurement best practices and how-to-guides, ProcurePort is the place to find anything and everything procurement.