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Vendor management means constantly working with your vendors to come to agreements that will mutually benefit both companies. Communicate regularly and frequently - The most important success factor of vendor management is to share information and priorities with your vendors. Allow key vendors to help you strategise - If a vendor supplies a key part or service to your operation, invite that vendor to strategic meetings that involve the product they work with. Understand vendor's business - A key component of vendor management is to contribute knowledge or resources that may help the vendor serve you better. Getting to know the vendor's business and their business model for profitability will help you understand their side of the partnership and will build a better relationship between the two companies. Building long term relations-Vendor management seeks long term relationships over short term gains and marginal cost savings. Constantly changing vendors will cost more money in the long run and will impact quality. Other benefits of a long term relationship include trust and access to insider or expert knowledge. Creating value-Vendor management will focus on quality for the money that is paid. Monitor Performance-Once the relationship with the vendor has begun, don't assume that everything will go exactly as specified in the contract. The vendor's performance must be monitored constantly in the beginning. This should include the requirements that are most critical to your business. For example: delivery times, quality of service performed, order completion, call answer time, etc.
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