Vendor Management

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Eduxir
Published at : 08 Dec 2020
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How does the organizations manage their vendors?

Vendor management refers to the process that helps the organizations to
- find the vendors
- Evaluate them and ensure that they are qualified
- conducting business with the vendors.

The process usually starts once the need arises to outsource a given task to a vendor. Organizations perform the following activities to accomplish vendor management..

- Researching vendors who can perform the required tasks
- Negotiating and enter into contract.
- Price quotation
- Performance evaluation
- Preparation and maintenance of the vendor related documents
- Processing of the payments.

The organizations research and come up with a list of vendors who can perform the task and deliver it with quality. All the chosen vendors are then evaluated based on the following factors.

- Capability
- Pricing
- Quality
- Past history or goodwill

Initially quotations are obtained from each of the vendors, their references are checked, and then the company is researched thoroughly through online resources. Once this is done their financial stability, certifications are insurance details are evaluated.

Once a list of vendors are chosen, the responsibility of the vendor managers lies in

- Managing a list of vendors
- Allocating tasks or contracts when necessary
- Keep a check on their performance
- Ensure that the agreed upon contract rules are followed.

Big organizations will usually have a pool of vendors. Depending on the past performance a specific vendor might be best suited for a specific task while secondary preference is given to other vendors. When the preferred vendor is not able to take up a project or task or unable to deliver then the other vendors will be allocated with the assignment.

Vendor management usually requires huge documentation work. The databases need to be integrated with various accounts payable systems. In this process it usually requires obtaining vendor information like contact information, insurance/tax related documents etc. When the vendors have access to confidential information it is essential to get the non-disclosure or similar agreement signed in from them and documented. All such documents thus procured should be updated each year.

Additional content on this topic can be found at http://www.eduxir.com/curriculum/cbse/class-xii/entrepreneurship/enterprise-marketing/
EntrepreneurEntrepreneurshipEnterprise Marketing

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