How can you create a vendor feedback system that benefits both parties?

We used four different vendor partners and were able to bring the cost of technology by more than 20%. The feed back system was continuous i.e. through the year and specifically once a year. It was not about specific people but about the process, speed of reaction to requests and more importantly what can be done to improve the quality and timeliness of deliveries. At times we asked our business partners also to participate in the feedback. Overall it worked well and helped us to continuously improve.

Creating a vendor feedback system that benefits both parties involves constructing channels for open communication, setting clear evaluation criteria, and maintaining a reciprocative approach. Here are a few steps to establish such a system: Establish Clear Objectives, Set Clear Evaluation Criteria, Develop a System or Process, Timely and Regular Feedback, Two-Way Feedback, Confidentiality, Actionable Insights, Review and Act on the Feedback, Acknowledgement and Rewards, Be Open to Suggestions A well-designed vendor feedback system can lead to continuous improvements in performance, reduces issues and conflicts, and can contribute significantly to maintaining a healthy and productive relationship with the vendors.

The vendor feedback system a very much talked about process and evolved quite a bit. The major points of feedback are delivery schedule , quality of product supplied, payment etc. Getting written feedback for each order is most common way of doing it. I strongly suggest a yearly physical vendors meet to get real feedback .

A symbiotic vendor feedback system thrives on clear communication, structured feedback mechanisms, and timely exchanges. Constructive, specific feedback, coupled with recognition of exceptional performance, forms its core. Regular reviews and collaborative implementation of changes enhance the relationship. Closing the loop on feedback is pivotal, ensuring updates on actions taken. Long-term partnership building remains the goal, evolving positively with consistent, technology-driven feedback integration. This two-way street fosters transparency, growth, and a collaborative environment, benefitting both parties by fostering mutual understanding and continual improvement.

Vendors provide goods and/or services. Typically they fulfill a gap that cannot be filled by the employing organization. As a result of this relationship the vendor becomes an extension of the employing organization. If the vendor provides subpar products or staffing, is it not the employing organization that suffers? The first step of the “system” is in the vendor selection process, ensuring the vendor and the organization are aligned on core values, commitment to success, and expectations. The second step is to validate alignment with consistent frequency.

One key element in the a vendor scorecard is to establish transparent metrics with consistent and easy to use data collection models. Quality dependability performance is driven through engagement, service and feedback there needs to be mechanism to bring out positive exceptional contributions by the vendors during operational or developmental or innovation processes. It’s also important to keep tabs on key contributors and thought leaders from the vendor staff who are key personnel that need specific retention mechanisms and metrics.

1. Vendor Surveys feedback: focus on aspects such as communication, product quality, and overall satisfaction. 2. Performance Reviews: by implementing periodic performance reviews to assess key metrics and discuss achievements. 3. Feedback Sessions: Schedule one-on-one feedback sessions to encourage open communication. 4. Online Collaboration Platforms: Utilize collaborative platforms where vendors can provide real-time feedback and engage in real-time discussions. 5. Scorecard Metrics: Develop a scorecard system with predefined metrics, allowing vendors to self-assess.

A few years ago, I started experimenting with a version of a net promoter score (NPS) to grade vendors (suppliers) as a report card. Reichheld, the original developer of the NPS, simply asked, “Would you recommend this brand to your friends and family.” As a mod, I used five questions as a lead line, providing support, quality, pricing, and ease of business. The total provided the baseline score. Of the twenty NPS conducted internally, only two brands made the positive scale, and these results were novel. The surveys were sent to everyone interacting with the brand from inside and outside sales, engineering, purchasing, and leadership.

Vendor feedback should be in-built within ERP system based score card covering delivery, quality, credit facility, rate or price, etc. This rating itself evaluates SWOT analysis of vendor performance. Based on % score , course of action to be decided y-o-y. Engagement in improvement of products and services (co-creation) boost morale and relationship both sides. Long terms associations should be managed with awards and recognitions.

I think the variable here is the vendor and what they provide. Methods should be based on the criticality of their product/service. Lumping all vendors into a singular score card will make it difficult to identify brand impacting issues.

The frequency of your vendor feedback system should be tailored to the dynamics of the vendor relationship. For ongoing partnerships, regular feedback, such as quarterly or semi-annually, ensures adjustments are made in a timely manner according to the interconnectedness of the partnership. For projects where vendors are fairly new and adding to that projects strategic impact, more frequent evaluations, perhaps monthly, may be appropriate to address immediate concerns and improve performance.

Ensure consistency and effectiveness in your vendor feedback system by adopting a standardized format. Develop templates with pre-defined criteria and questions; For example, evaluating the effectiveness of communication, product quality, compliance to laws and regulations and adherance to delivery deadlines. This simplifies the evaluation process, making feedback analysis effective and providing valuable insights for improvement.

Being honest and respectful is crucial because it forms the foundation of trust and effective communication. Honesty builds credibility and trustworthiness in relationships, whether personal or professional. It fosters transparency and integrity, allowing for open and genuine interactions. Respectful behavior demonstrates consideration for others' feelings, opinions, and boundaries, contributing to positive and constructive relationships. Overall, being honest and respectful cultivates trust, encourages healthy communication, and forms the basis for meaningful and lasting connections.

Maintain a crucial balance in your vendor feedback system by ensuring honesty and respect in both giving and receiving feedback. Avoid rudeness, aggression, or defensiveness to foster a constructive and collaborative environment. This can be done by focusing on constructive language, emphasizing specific examples, and framing feedback as opportunities for improvement rather than criticism. Foster open communication, actively listen to vendors perspectives, and encourage a collaborative approach to problem-solving. Provide positive reinforcement for strengths, and offer solutions or suggestions for areas that need improvement. This approach enhances the feedback effectiveness and strengthens the vendor-client relationship.

Vendor Feedback System can be used for: - Product / Service Development - Delivery Benchmarks and Standards - Delivery and Revenue Leakages - Supply <-> Demand ratio - Stock Management

Vendor Management Feedback Systems have been with us for many years. This post represents an excellent method/process. The key is to make sure: 1. There are clear lines of responsibility 2. Responsible parties are held accountable 3. The approved method/process is followed: a. Consistently b. Timely 4. There should be incentives/penalties for meeting/missing KPI’s The Quarterly Review is a fine event to help ensure the responsible parties are meeting at the appropriate frequency and are presenting the performance of responsible parties using approved method/process. No need to reinvent something when there is a proven solution available!