The Golden Rule of Vendor Management

The Golden Rule of Vendor Management

 

I recently asked some of the best and brightest minds in Procurement (via the Procurious forum), for their top advice and best practices on supplier relationships, for their "golden rule" of vendor management.

Not too surprisingly, the collective response was the "rule" itself: treat your vendors as you would like to be treated. 

Here's their wisdom on how to set the standard, and give what you expect.

 

 

Be a true partner 

Successful vendor management begins with a give & take mentality. Don't be a "one and done" purchaser. 

Make it work for everyone

"The strategic purchases are critical and complex and require more long term inter-beneficiary partnerships, where the give and take is balanced, in favor of both sides in a spirit of respect and cooperation. Maintain procurement ethics in mind in all steps of building a relationship with you suppliers, a good, fair, "healthy" and proactive relationship without making concessions on the business interests, this would be the most important I think." - Heifa B. Kourda, Contract Specialist 


 

Bring them to the meeting

"Additionally a partnership style relationship. Bringing the supplier to strategic planning meetings for example."  - Samantha Coombs BSC CIPS, Procurement Professional


 

 Be a good customer 

"My approach is to be the best customer I can be. This then usually ensures that I get the best possible service in return when the chips are down. Suppliers will tend to be more flexible and will relish working with you." - Jason Kay MCIPS, Procurement Manager & CIPS Branch Chair




I often hear vendors complain that they feel "disposable," more like cheap cutlery than a crucial partner. Which may be fine for a short-term relationship where neither party is deeply invested. But we need to realize if expect vendors to be invested and loyal, to deliver at a partnership level, we need to treat them like one. 

Bottom line, we cannot demand more than we're giving.

 

 

Be trustworthy 

Let's be honest, not every vendor relationship is created equally. Some are short-term, low risk, low investment. But for the long-term relationships, it's crucial we understand how to cultivate trust. 

Vendor relationships are as important as customer relationships  

[Traditional Transactional buyer/supplier relationships] "are often called an arm’s-length relationship. Here neither party is really concerned about the other party’s well-being. There is very little trust involved in this relationship and transactions may be infrequent between the buyer and supplier.  

"For items that have a more strategic role in a firms operations or business, a Collaborative Relationships may be explored. A collaborative relationship is one of mutual benefit to both parties. There is a varying level of trust, but some is required. Companies will work together for increased savings and future innovations...

""Work as hard on building a good "strategic" supplier relationship as you do building a good relationship with your customers."- Ed Nagy, Procurement Professional 


 

Honesty 

"Be honest with them, and they'll be honest with you." - Ed King, Technical Buyer 




A wise Entrepreneur once advised me to only trust people "with skin in the game." That "skin," that sacrfice, is what makes us accountable, and consequently, trustworthy.

In other words, real partnership requires trust; and trust happens when both sides are equally vulnerable and invested. 

 


   

Conclusion  

Vendor relationships, like any relationship, require continual investment. Contact and cooperation can't be the exception to the rule, and they can't be one-sided. Being a "good Buyer" entails intentionality and effort. But as all the wise advice all suggests, it's worth it because your ROI usually mirrors your investment.

So set the bar high. 

 The Golden Rule of Vendor Management - get what you give

 

Of course, it's easier said than done. Managing suppliers and vendors well can be incredibly difficult. The process necessitates everything from effective comparison and selection to communication and contract management. But amidst the practicalities, just remember that vendors are people. And building relationships (with anyone), ultimately boils down to one thing: considering their needs as well as your own. 

We believe the purchasing process should be easier for everyone, Buyers & Sellers alike. 

If you issue Request for Proposals, we'd like to give you and your vendors a simpler RFP process. 

 

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Ps. What's your best vendor management advice? Include it in your comment, we'd love to hear it!