Vendor management involves controlling costs, driving service excellence, and mitigating risks from third-party vendors. It includes properly classifying vendors, performing due diligence on new vendors, assessing risks, managing contracts, and monitoring vendor performance on an ongoing basis. Effective vendor management can reduce costs, create loyal relationships, increase efficiencies, and protect an organization's brand. It is a top priority for businesses as it helps to mitigate risks from external vendors and optimize overall performance. The global e-commerce software market has seen constant annual growth of around 4.2% due to more companies adopting vendor management systems.

1. VENDOR
MANAGEMENT
MMS (17-19)
Welingkar Institute Of Management

2. Who is a ‘Vendor’ ?
• A third party that performs function on
your company’s behalf of providing
services or goods to your company or the
individual.
• A vendor is a party in the supply chain
that makes goods and services available
to companies or consumers.

3. Retailer Vendor
Who are they?
person or business who
sells the products or
services directly to end
customers.
Individuals or firms hired
to provide a specific
service or product within
their normal business
operations
Functions
Their basic function is to
sell the products.
Their basic function is to
supply the products.
Contract base
There is no such
contractual base
Their relation ends within
a contractual base
Product cost
They sell the product at
the recognized and
defined rates.
They are known to sell
the products at the
affordable and convenient
rates.
Account existence
There is no account
strategy among the
retailers.
The vendors account is
cleared within the fixed
period base.

4. Vendor Management
• Vendor management is a discipline that
enables organisation to control costs, drive
service excellence and mitigate risk to gain
increased value from their vendors
throughout the deal life cycle

5. Proper
Inventory
Classification
Perform Due
Diligence
Risk
Assessment
Contract
Management
Ongoing
Supervision
and Monitoring

6. Proper Inventory Classification
• Identify all vendor relationships that exist in the
organization.
• Review each relationship and analyze the
criticality of each vendor.
• Store all your critical data and information in one
location for easier access.

7. Due Diligence In Vendor Selection
Due diligence requires a reasonable inquiry into vendor’s
ability to operationally meet the requirements for the
proposed services and a inquiry into the vendor’s financial
ability to deliver on its promises
• Company should question operational issue, staffing, expertise,
and vendor’s internal control.
• The other important thing is to consider the vendor’s financial
conditions. As failing the given promises may affect company in
loosing business.

8. Risk Analysis
Risk Analysis requires the company to identify the
importance of the function to the organization, the
nature of the activities the vendor will perform, and
the inherent riskiness of the activity.
• What would be the effect on the company if the function
failed or was not adequately performed?
• Are there other potential vendors that could quickly
provide the same service if the current vendor fails?

9. Contract Management
• All Contract should be written and to extend applicable.
• A strong contract with a significant vendor is essential to
properly maintaining long-term relationship with the vendor.
• Even relationship with vendors that provide low-risk services
should be documented in simple contracts.
• It should cover :
• Expectations
• Responsibility
• Price
• Scope of work
• Acknowledgment that vendor is subjected to regulatory review

10. Supervision and monitoring
• Monitoring and supervision should include an
ongoing review of the vendor’s financial
condition, policies, internal controls, and ability to
meet its obligations.
• Doing this increases accountability and
transparency between your organization and all
vendors.

11. 07 reasons why vendor management
should be a top priority in business.
1. Mitigate Risks
2. Optimize Performance
3. Reduce Costs
4. Create Loyal Relationships
5. Increase Administrative Efficiencies
6. Increase Onboarding Speed
7. Protect Your Brand

12. Vendor Management Software Company
• Supplier Soft
• Isolocity
• Beeline VMS
• Bravo Solution

13. Size of the e-commerce software/application
market worldwide from 2015 to 2021 (in $ mn)
constant annual growth rate of 4.2 percent CAGR,

14. How To Sell Vendor
Merchandise Online, while
they Stock/Ship Orders for
you?

16. References
• https://quantivate.com/blog/five-steps-successful-vendor-
management/
• https://www.celerant.com/retail-software/vendor-
management/
• http://www.bizbrain.org/faq/what-is-an-e-commerce-
vendor/
• https://www.hcmworks.com/blog/7-reasons-why-your-
business-should-focus-on-vendor-management