Photo by Sebastian Herrmann on Unsplash
On a macro level, much has been said and written about solving supply-chain issues. Nearly half (47 percent) of all vendor partnerships start having issues.
Of course, that means a huge waste of time and money that might have been avoided because the companies didn’t plan a streamlined proces.
After all, just one glitch can prevent profits and satisfaction with the end users. That’s because a supply chain is complex — from leveraging source materials and manufacturing to sales to the final destination of customers.
Not to over simplify, there are typically four basic phases:
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- Integration — strategic planning, continuous sharing of information communication about data analysis and storage of materials.
- Operations — involving inventory and production schedules.
- Purchasing — sourcing products and capitalizing on competitive prices.
- Distribution — the transportation, delivery of goods.
So, for competitiveness and profitably in buyer-supplier relationships, it’s important for companies to focus on their vendor relationships — from a smooth flow of data to effective operations.
Mistakes are too expensive and must be averted. That requires finding the right vendors and knowing their processes that will lead to productive negotions for a deep relationship with them for mutual satisfaction.
It’s important to utilize the right software to deeply monitor situations for proper planning, onboarding and performance.
Consider valuable reminders from Contract Lifecycle Management (CLM):
Key Steps to Take
1. Research vendors thoroughly
2. Obtain quotes and other elements of acquisition
3. Negotiate contracts strategically4. Capitalize on modern vendor relationship management strategies and tools
5. Evaluate vendor performance regularly
6. Renegotiate or terminate a vendor contract if unsatisfactory
How to Improve Vendor Relations
1. Take the time to gain a better understanding of the vendor’s business and use it to conduct negotiations based on value, good faith, and forming a partnership that both parties want to last.
2. Consolidate vendor management demands by limiting how many vendors are being used, allowing more money to be spent with each while building stronger relationships, which often result in better service.
3. Incorporate risk-sharing into vendor contracts to reduce the amount of uncertainty surrounding supply chain volatility, demand fluctuations, etc., and help support a solid foundation of trust.
4. Utilize scorecards, vendor ratings, reviews, and other means to measure performance and identify specific areas of improvement within the relationship.
5. Invest in a Contract Lifecycle Management (CLM) software platform to enhance negotiations, streamline the onboarding process, and more accurately track vendor contract performance.
From the Coach’s Corner, see these tips:
Leadership Best Practices in Negotiations – 22 Dos, Don’ts — Leaders know that no matter what you need to negotiate, there are often easy strategies to get anything you want. Even in tough negotiations, you’ll want both parties to feel positive after the negotiation is complete. Emotional needs for both of you have to be met. Here’s how.
Marketing Pros Need to Use These Negotiation Strategies — You’ll become a better marketer, if you know the right strategies and master your skills in any negotiation. See these tips.
Develop a Durable Supply Chain Despite Coronavirus— There are steps you can take to alleviate the health and economic challenges to your supply chain – now – and for the future.
How to Get Great Service from Dysfunctional Vendors — Do you ever feel people treat you like a doormat with their crazy behavior? If so, here are proven steps to stop the insanity and get what you want.
KPIs in Managing Your Inventory for Ecommerce Profit — Management of inventory is crucial in ecommerce, if your business is to be profitable, sustainable and able to grow. At the minimum, you should leverage three key performance indicators.
“Surround yourself only with people who are going to take you higher.”
-Oprah Winfrey
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