VENDOR

MANAGEMEN
T

MMS (17-19)
Welingkar Institute Of Management
 Who is a
‘Vendor’ ?
• A third party that performs function on your
company’s behalf of providing services or
goods to your company or the individual.

• A vendor is a party in the supply chain that

makes goods and services available to
companies or consumers.
 Retailer Vendor
Individuals or firms hired
person or business who
to provide a specific
sells the products or
Who are they? service or product within
services directly to end
their normal business
customers.
operations

Their basic function is to Their basic function is to

Functions
sell the products. supply the products.

There is no such Their relation ends within

Contract base
contractual base a contractual base

They are known to sell the

They sell the product at
products at the affordable
Product cost the recognized and
and convenient rates.
defined rates.

There is no account The vendors account is

Account existence strategy among the cleared within the fixed
retailers. period base.
 Vendor
Management
• Vendor management is a discipline that
enables organisation to control costs, drive
service excellence and mitigate risk to gain
increased value from their vendors throughout
the deal life cycle
 Proper
Inventory
Classification

Ongoing Perform Due

Supervision Diligence
and Monitoring

Contract Risk
Management Assessment
 Proper Inventory
Classification
• Identify all vendor relationships that exist in the
organization.

• Review each relationship and analyze the

criticality of each vendor.

• Store all your critical data and information in one

location for easier access.
 Due Diligence In Vendor
Selection
Due diligence requires a reasonable inquiry into vendor’s
ability to operationally meet the requirements for the proposed
services and a inquiry into the vendor’s financial ability to
deliver on its promises

• Company should question operational issue, staffing, expertise,

and vendor’s internal control.

• The other important thing is to consider the vendor’s financial

conditions. As failing the given promises may affect company in
loosing business.
 Risk
Analysis
Risk Analysis requires the company to identify the
importance of the function to the organization, the
nature of the activities the vendor will perform, and the
inherent riskiness of the activity.

• What would be the effect on the company if the function

failed or was not adequately performed?

• Are there other potential vendors that could quickly

provide the same service if the current vendor fails?
 Contract
Management
• All Contract should be written and to extend applicable.

• A strong contract with a significant vendor is essential to

properly maintaining long-term relationship with the vendor.

• Even relationship with vendors that provide low-risk services

should be documented in simple contracts.

• It should cover :
• Expectations
• Responsibility
• Price
• Scope of work
• Acknowledgment that vendor is subjected to regulatory review
 Supervision and
monitoring
• Monitoring and supervision should include an
ongoing review of the vendor’s financial condition,
policies, internal controls, and ability to meet its
obligations.

• Doing this increases accountability and

transparency between your organization and all
vendors.
07 reasons why vendor
management should be a top
priority in business.
1. Mitigate Risks

2. Optimize Performance

3. Reduce Costs

4. Create Loyal Relationships

5. Increase Administrative Efficiencies

6. Increase Onboarding Speed

7. Protect Your Brand

Vendor Management Software Company
• Supplier Soft

• Isolocity

• Beeline VMS

• Bravo Solution
Size of the e-commerce
software/application market worldwide
from 2015 to 2021 (in $ mn)

constant annual growth rate of 4.2 percent CAGR,

 How To Sell Vendor
Merchandise Online, while
they Stock/Ship Orders
for you?
 References
• https://quantivate.com/blog/five-steps-successful-vendor-
management/

• https://www.celerant.com/retail-software/vendor-
management/

• http://www.bizbrain.org/faq/what-is-an-e-commerce-
vendor/

• https://www.hcmworks.com/blog/7-reasons-why-your-
business-should-focus-on-vendor-management