The document discusses the process of vendor management and building vendor relationships. It outlines four steps to the vendor management process: 1) establish business goals, 2) select the right vendors, 3) manage vendors daily, and 4) consistently meet goals. It also provides tips for building vendor relationships such as sharing information, allowing strategy and innovation, looking to the future, and focusing on win-win agreements. Effective vendor management and strong vendor relationships can optimize results and ensure profitability.

2. PROCESS OF VENDOR
MANAGEMENT

3. There are four steps
• Establish business goals like those mentioned above. It’s
much easier to select and manage vendors when you
have clearly defined performance parameters to
compare and contrast.
• Select the 'right vendors' you'll be able to match your
company’s performance characteristics. Every vendor will
have its strengths and weaknesses, and choosing the
right one is a very critical task to optimizing operational
results.

4. • Manage your suppliers on a daily basis, your vendor
managers will need to monitor performance and output,
ensure contract terms are being followed, approve or
disapprove changes, provide feedback, and develop
relationships through effective communication, honesty,
and integrity.
• You'll need to hit your goals on a consistent basis. This
requires continuous work in influencing vendors to meet
performance objectives to ensure profitability.

5. • Vendor management is typically broken down into four steps.
The first is the establishment of the business goals mentioned
above. It’s much easier to select and manage vendors when
you have clearly defined performance parameters to compare
and contrast.
• The second part of the process is to select the best
vendors that will be able to match your company’s
performance characteristics. Every vendor will have its
strengths and weaknesses, and choosing the right one is a
very critical task to optimizing operational results.

6. • Third is managing your suppliers. On a daily basis, your vendor
managers will need to monitor performance and output,
ensure contract terms are being followed, approve or
disapprove changes, provide feedback, and develop
relationships through effective communication, honesty, and
integrity.
• Finally, the fourth aspect of vendor management is meeting
your goals on a consistent basis. This requires continuous
work in influencing vendors to meet performance objectives
to ensure profitability

7. BUILDING VENDOR
RELATIONSHIP

8. • To get the most success out of your vendor management
process, you need to take a strategic approach to building and
maintaining relationships with your best vendors. Good
suppliers are hard to come by, so it’s important to nurture
your relationships with the suppliers you don’t want to lose.
• Share information and priorities: For your vendors to
effectively meet your needs to the best of their ability, it’s
important for you to provide the necessary information in a
timely manner. This might include launch dates, changes in
design, forecast information, and other pertinent information
that might affect quality or service.

9. • Allow strategy and innovation: When you and your vendors
work together on strategy, you can get the best value for your
money. Invite the vendor to meetings that involve the product
he is working on. You hired him because he’s an expert in that
area so he could provide valuable insights or innovative
suggestions that make the product better or even cheaper,
which could give you a competitive advantage.
• Look to the future: Short-term relationships with vendors will
only lead to short-term gains and marginal cost savings. The
real value comes from building partnerships for the long
terms. Doing so will enable trust and commitment from your
vendors, which could lead to discounts, preferential
treatment, and access to expert knowledge.

10. • Focus on win-win agreements: You won’t be able to build
relationships with strong-arm negotiation tactics. Instead,
you’ll create resentment that can lead to further problems
down the road. Focus on negotiating agreements in good faith
that allow both parties to walk away feeling good about the
deal.
• To get the most out of your vendor relationships, you
need effective vendor management. Make sure you consider
all four parts of the process and focus on building
relationships, and you’ll get better value from your suppliers.