What does Vendor Relationship Management mean?
Vendor (or Supplier) Relationship Management involves systematic processes to manage relationships with external partners and vendors, ensuring efficient collaboration, compliance, and performance monitoring. VRM encompasses all activities and processes around suppliers and vendors throughout their lifecycle. This means from their search and selection, through the conclusion of contracts, delivery management, to the termination of the contractual relationship. Supplier relationship management mainly includes the following processes and activities:
Key Areas of Vendor Relationship Management
- Vendor Selection
- Vendor Onboarding
- Vendor Contract Management
- Vendor Performance Monitoring
- Vendor Risk Management
- Communication and Collaboration with Vendors
- Compliance Management of Vendors, and Regulatory Adherence
- Vendor Exit
What Company Need to Manage Vendors and Suppliers?
Centralized Vendor Database
- Centralized Vendor Database offers a single source of truth for all vendor-related information, making it easier to manage and access data.
- Keep track of all vendors and store key details about your vendor companies or suppliers.
Vendor Selection
- Identify the right partners and vendors from the vendor marketplace.
Vendor Onboarding
- Simplify the process of adding new vendors while ensuring compliance with company policies and regulations.
Vendor Contract Management
- Ensure all contract obligations are met and properly documented.
- Keep organized records of vendor contracts, terms, and important dates to stay compliant and manage renewals or negotiations smoothly.
Vendor Performance Monitoring
- Monitor vendor performance based on set metrics and service level agreements (SLAs).
- Regularly review vendor performance to ensure they meet your business goals and quality standards.
Vendor Risk Management
- Identify, evaluate, and manage risks related to your vendors.
- Use tools designed to reduce vendor-related risks.
Communication and Collaboration with Vendors:
- Provide a centralized platform for all vendor communications.
- Maintain records and notes from negotiations and meetings with vendors and suppliers.
Vendor Compliance and Regulatory Management:
- Ensure vendors follow legal, regulatory, and internal company policies.
- Automate compliance checks and audits for easier management.