Initial Approach

1. Define business goals - Identify business requirements for an optimal vendor portfolio. Assess needs across all lines of business to provide a holistic approach to vendor management.
2. Creating a vendor management team – hire and recruit dedicated resources to run and maintain a successful vendor management program.

Process Implementation of Vendor Management Goals

Common steps to take to run a vendor management strategy and office

1.  Selecting vendors– Selection of vendors through proposals and bidding process. Comparing and contrasting vendors in the market to select one that fits the best need for the business.
2.  Start contract negotiations– establish terms and conditions and best prices for selected vendors.
3.  Onboarding of vendors– bring in vendors according to company standards and fulfill all necessary compliance and regulatory needs within the company and operating environment.
4.  Evaluate vendor performance– Routine checkpoints with vendors to ensure quality measures are being met. SLA evaluations are to be ongoing to ensure consistency and improvement.
5.  Managing risks- Risk management entails follow-up with vendors to ensure standards are being followed. Review of vendor portfolio to optimize financial goals and reduce risk.
6.  Service payments – according to the contract vendors will need to be paid by terms specified in a timely matter to prevent service disruption.

Recommended reading:

The Vendor Management Office: Unleashing the Power of Strategic Sourcing

by Stephen Guth 

Supplier Relationship Management: How to Maximize Vendor Value and Opportunity

by Stephen Easton, Michael D. Hales, et al

Vendor Management Paperback – July 13, 2015

by Agostino Carrideo