Vendor management is vital for the smooth running of an organizational supply chain and related value addition procedures. Chief procurement officers must consider the suppliers’ capability, delivery time, and production practices while choosing a vendor or a supplier. Previously, the procurement function knew very little about their suppliers or what they did. However, today, owing to the globalized supply chain networks and severe competition in the market, the Chief procurement officers have understood the advantage of having a strong vendor management practice in place.
Importance of Vendor Management for Procurement:
It is essential for a company as it can have a vast impact on the business and cause a financial loss. Thereby, making an effective supplier management practice, which is crucial for procurement purposes.
Here are a few reasons why vendor management is of utmost significance for the sourcing and purchase purpose-
- If the vendors are not managed appropriately, it can disturb or bring to halt the complete supply chain flow and hurt the organizations bottom-line
- Supplier performance and adherence to service level agreements is vital for the smooth flow of operations, profiting from supplier relations, and thereby decreasing the potential risks
- This assists in diminishing the Individual expenditures within the organization and procuring contracts at pre-negotiated suppliers from preferred and top-rated suppliers and thereby confirming predictable financial outcomes for the company
- It also supports in forming long term relationships with the suppliers and vendors, thereby refining margins and improving logistics operations
Vendors or suppliers are those businesses and individuals that give input materials, goods, and services to an entity. As per traditional procedures, vendor management was believed to be just a process to source the cheapest vendor. Vendor management includes services like sourcing, requisitions, attaining quotations, negotiations, relationship management, and ensuring payments. ASC Group helps in streamlining the processes and ensures an effective and efficient organizational supply chain
