Vendor management refers to the processes that organizations use to manage their suppliers. It includes activities like selecting vendors, negotiating contracts, controlling costs, reducing risks, and ensuring service delivery. Vendor management aims to build good long-term relationships with suppliers to avoid supply disruptions and meet business objectives cost-effectively. It allows companies to onboard multiple vendors to minimize risks and costs while improving customer satisfaction, profitability, and growth. The key steps in vendor management are selecting vendors, negotiating contracts, onboarding vendors, tracking performance, monitoring risks, and making timely payments.

1. Vendor
Management
Thought shared by: Sangita kumari
Tinu kamal
Course : MBA(Dual specialization )
Semester : Final year odd sem

2. Supply chain management
• supply chain is the network of all the individuals,
organizations, resources, activities and technology
involved in the creation and sale of a product.
• A supply chain encompasses everything from the
delivery of source materials from the supplier to the
manufacturer through to its eventual delivery to the
end user.

3. Definition
• A supply chain consists of all parties
(manufacturers, suppliers, transporters,
warehouses, retailers, and customers) and,
within each organization, all the functions
involved, directly or indirectly, in fulfilling a
customer request (Chopra and Meindl 2010).

4. Elements of supply chain
• Supply chain management has five key elements—
planning, sourcing raw materials, manufacturing,
delivery, and returns.
• The planning phase refers to developing an overall
strategy for the supply chain, while the other four
elements specialize in the key requirements for
executing that plan. Companies must develop expertise
in all five elements to have an efficient supply chain and
avoid expensive bottlenecks
• Generally the key aspects of Supply Chain management
are Purchasing (sourcing), Planning (scheduling) and
Logistics (delivery)

5. Vendor Management
• Vendor management is a term that describes the
processes organizations use to manage their suppliers,
who are also known as vendors. Vendor management
includes activities such as selecting vendors, negotiating
contracts, controlling costs, reducing vendor-related risks
and ensuring service delivery in supply chain?
• Vendor management is a term that describes the
processes organizations use to manage their suppliers,
who are also known as vendors. Vendor management
includes activities such as selecting vendors, negotiating
contracts, controlling costs, reducing vendor-related risks
and ensuring service delivery

6. Vendor management
• Vendor management is a structured process
that businesses follow to manage their
suppliers or vendors. Vendor management
focuses on building/maintaining good working
relationships with suppliers on a long-term
basis; so as to prevent potential supply
disruptions and meet business objectives at
the best value

8. Importance of Vendor
Management
• It opens up possibilities for faster onboarding of multiple
vendors that can minimize potential supply-side risks and
delays. With a selection of suppliers at hand, the business
also enjoys lower costs and faster delivery to maintain
continuity in business.
• Streamlining the vendor process can ensure mutual trust
and stronger relationships.
• It can help increase business efficiency with a focus
towards improving customer satisfaction, profitability and
growth.

9. Vendor Management Process

10. 1.Choosing vendors
The process starts by making a selection of vendors
deemed suitable for the business. Then quotes are
sought using e-sourcing tools such as Requests for
Quotation and Requests for Proposals . Though price
will be a deciding factor, the company can also gauge a
vendor’s potential based on quality, reputation,
capacity to meet requirements and track record.
2.Engage in contract negotiations
This stage involves discussions on the terms and
conditions of the contract between the company and
the chosen vendor. Terms can be related to the
type/quantity of the goods and/or services, delivery
dates, payment terms, and legal conditions that cover
risks.

11. 3.Onboarding of vendors
The process of collecting relevant information and
associated documents is important to recognize
vendors as approved suppliers for the company. Bank
account information, tax forms, valid industry
licenses, are some of the main information collected
to make payments to vendors and for audit purpose
4. Track and evaluate vendor
performance –
compare need to check vendor performance to see if
standards are met, quality of products or services are
good, deliveries happen on time, and service is
satisfactory. Deviations can be set right with action
plans discussed with vendors to ensure smoother
business transactions

12. 5. Monitoring and managing risks –
Risk management involves assessing and monitoring
vendors for potential risks that can impact the
business harshly. Breach of compliance, vendor fraud,
data leaks, lawsuits, loss of intellectual property are
all serious risks that need to be addressed as part of
risk monitoring.
6. Timely payments –
Making payments on time to vendors can be crucial to
ensure good working relationships. Following contract
terms for payment and ensuring invoices get cleared
without delays can build trust and confidence for
vendors to maintain continued services.

13. Benefits of Vendor
Management
1.Facilitates better selection
2. Cost-effective negotiations
3. Effective contract management
4. Easier performance management
5. Stronger vendor relations
6.Better risk mitigation

15. Thank
You