Proper vendor management requires several different actions and phases to be put into place. It also requires that certain mistakes not be made. As you work with your vendor management software and implement your new program, make sure you are not doing any of the following.
Assuming Longevity Equals Integrity
Before you had a formalized, vendor management system, you undoubtedly have a list of favored vendors. The reasons why they are favored can vary. One might be fast on turn around. Another might be great on pricing. Still, another might focus solely on you and gives you stellar customer service, no matter what you want.
That said, the scrutiny created with your supply management software with some vendors might yield results that preclude them from working with you. One vendor might have social issues that violate your company policy. Another might have a history of stiffing customers when business slows and you just were fortunate all these years. The list can go on and on.
Every vendor needs to be vetted, with no exception. You can decide to allow a vendor to stay, even if some information gathered is not flattering. But you need to know who you are working with.
Going Without a Contract
In less formal days, not having a contract was not such a big thing, nor that unusual. Total office and production automation have changed all that. Now you need a contract and going without one leaves you wide open in terms of liability if anything goes wrong. Make sure that even with clients you have worked with for ages, that you have a contract in place.
Not Having a Termination Clause / Procedure
Very few people plan on a relationship, business or personal, ending. This is because few of us are such pessimists that we assume something that is working will inevitably fail. While failing in a personal relationship causes heartache, failing in a business relationship by not having a termination clause can cost your company a lot of money.
Not Implementing Documentation Procedures
Often, when you have worked with a vendor for a long time, having paper or electronic documentation is treated as a formality. Vendor management software makes that almost impossible. That means you need to implement documentation procedures as well as change processes. That way, if you ever have a conflict with a vendor, you have the backup you need to verify your position.
Your vendor management software will change a lot of the way you do business. Avoiding these mistakes will ensure that the transition goes smoother.