Vendors play a critical role in helping move goods and products through the supply chain. But, if you have many different vendors spread across the U.S. and worldwide, managing vendor relationships can be very difficult. That’s why your company needs to think about building a vendor management program.
Historically, companies have attempted to manage their vendors using spreadsheets and individual pieces of software that are not connected to their master supply chain platform. The thinking is that if we keep vendor management in a separate bucket, we can better focus on managing this unique aspect of the supply chain.
That line of thinking may have worked during previous eras when supply chains were less complex, and vendors were easier to communicate with. Now, though, supply chains have become highly complex entities. Decisions need to be made faster than ever before, costs need to be carefully monitored, and vendors need to be deeply embedded in supply chain processes – not kept at arm’s length!
Now is the time to take steps toward bringing your vendors together in a dedicated program. Let’s take a closer look at why this is important.
5 Reasons to Build a Vendor Management Program
The best way to think about a vendor management program is that you should be striving to advance from transactional exchanges with vendors to engage in a true working relationship. Consider why this matters.
1. Improve Communication
For years, supply chains have suffered from ineffective, wasteful communication. And that’s just internally! The problems are even greater when working with external parties such as vendors.
- Does your company use different communication platforms than what your vendors use?
- Even worse, does each vendor prefer a different communication platform, meaning your team has to utilize many different applications?
- Do you have to manually translate information from emails and phone calls into your system?
- Are there time zone issues where you can’t get hold of vendors during certain periods of the day?
In a transactional working arrangement, your team spends way too much time tracking down vendors, obtaining status updates about shipments and orders, and then dropping that information into your system.
The goal should be to move to a relationship where your vendors can update information on their own in your system, eliminating extra steps and saving your team a tremendous amount of time. Improving vendor communication is a critical step to helping your company.
2. Provide the Right Level of Access
You may have reservations about allowing vendors into your system to update the status of orders and drop in other information, and that’s where CloudLogix can alleviate this concern. Our platform allows you to set up role-based access controls to third parties such as vendors.
You can provide vendors with restricted access to supply chain data so that they can only view, update, and save changes to orders that pertain to them. Additionally, they will only be able to access data on your end that is relevant to them.
You can achieve the best of both worlds through the custom roles functionality in our platform. You’ll be able to bring vendors into your system to advance the working relationship without giving them access to the entire supply chain.
3. Cost Control
Costs can quickly become out of control when you’re trying to manage vendors individually. Building a vendor management program will give you the necessary oversight into spending from all vendors.
You don’t want to be surprised when a vendor sends you a bill far exceeding expected costs. When you have a program, you can get ahead of expenditures, communicate with each vendor about why certain costs are rising, and take proactive steps to reconcile spending.
You’ll also be better prepared to enforce shipping rules and communicate other restrictions to vendors so that they don’t overspend on shipments and pass along the cost to your company.
4. Eliminate Spreadsheets and Disconnected Software
Having a program will eliminate the need for spreadsheets and separate pieces of software to manage vendor relationships. When you work with CloudLogix to support your program, we’ll create cost savings for your company by centralizing all supply chain data in one location.
Your team will also realize time savings by only needing to use one platform to manage vendor relationships. No matter tabbing back and forth between multiple applications!
No matter how many vendors you work with domestically and internationally, we can set up integrations with their systems to bring data into the CloudLogix platform. This streamlined approach to vendor management will allow your team to quickly view the status of each order, communicate with each vendor, get out ahead of changes, and keep costs under control.
5. Support Cybersecurity
Another key reason to set up a program is to maintain a strong cybersecurity posture. Cyberattackers are increasingly targeting companies that operate in the supply chain, and they’re looking for gaps that they can exploit to swipe data and other valuable business information.
Maintaining fractured relationships with vendors will leave your company exposed to security risks. However, building a program will allow you to tighten up data sharing and access for each vendor, reducing the likelihood of data being exposed to bad actors.
CloudLogix can help in this area. Our cloud-based platform uses the latest security technology to protect your data. Plus, managed security comes standard with our platform. We are squarely focused on protecting your data when shared with third parties.
Now is the Time to Strengthen Vendor Management
There are many reasons why your company should establish a robust vendor management program. We can help you get there through our supply chain expertise and industry-leading platform.
Our experts have been in your shoes before. We understand the challenges of supply chain logistics, especially managing vendor relationships. Let’s identify the right solution to manage relationships with each of your vendors.
Contact us today to schedule a consultation with our team. We’re here to help your company advance its supply chain capabilities!
