You're starting a new job as a vendor manager. What are the most important things to know?

Having managed vendors for over 30 years, the first task for me would always be a high-level Swot of the vendor, followed by a more rigorous due diligence (typically the due diligence carried out prior to engaging into a contract). I had curated an SOP to be followed, with clear guidelines for registering a new vendor and that worked well in the multi-billion dollar transaction conducted by me.

The first step in vendor management is to understand who your vendors are, what they offer, and how they fit into your business strategy. You need to have a clear picture of the scope, quality, cost, and value of each vendor relationship. You also need to know their strengths, weaknesses, opportunities, and risks. This will help you align your expectations, communicate effectively, and evaluate their performance.

The second step in vendor management is to establish clear goals and metrics for each vendor relationship. You need to define what you want to achieve, how you will measure it, and how often you will review it. You also need to set realistic and mutually agreed upon standards, deadlines, and deliverables. This will help you track progress, identify issues, and provide feedback.

It is necessary to set expectations with the vendors. Thus, I invariably have clarified to the vendors if we will take 20% of supplies from them and the reasons. The level of quality control, payment terms, importance of timeliness, liquidated damages, etc should be well explained. I also advocated holding regular CRMs (contract review meetings), which went a long way in having proper vendor relationships.

When in difficult times, it is my vendors who invariably provide me the solutions. Vendors, when treated with respect, and as partners - truly function as ‘partners in progress’. I have had vendors make solemn resolves to help us eg.. one had committed “We will not let the material touch the ground, and will pass hand to hand”. The result was that what was considered to be impossible to be delivered in less than 28 weeks, actually got delivered in 4 weeks. This is just one of the hundreds of real-life situations that I can cite that vindicate that your vendors are the most trustworthy partners, and whose relationship deserves to be invested in.

Vendors are partners and to be supported as you would your team members. They always want to help, but invariably some kind of support helps. At times I have had vendors who regretted supplies citing the non-availability of raw materials and we walked an extra mile to organise those for them, which only came back a full circle. Supporting with Permitting, liquidity, even compensating to make up for unforeseen losses, and helping coordinate with other vendors and contractors are amongst some measures that ensure timeliness, particularly of a green field project and operational continuity.

I would say this is really important. And you need to plan this activity timely, few month before the renewal date, so you can do market research, to check the current prices. To check the performance with stakeholders and plan how you want to adapt contract terms based on the outcomes.