Vendor management experts for a long time have been focused on managing existing vendor relationships. However, their advice fails to draw attention to actions needed when vendors simply do not deliver. Is there a time when a business owner is allowed to play the ‘enough is enough’ card? It takes a lot of effort to severe a business relationship, but it might just be what your business needs to remain relevant. How do you know it is time to let go of a troublesome vendor?
Vendor Management Q: Is a vendor responsible for losses in the business?
You might have noticed it from the start or your vendor might have just started cutting corners and being careless. Any mistake on the part of the vendor that leaves a dent in your business is worth paying attention to. Issues like product recalls, repairs and returns are quite common in business but not when they are as a result of a vendor mistake. A vendor on the wrong will often offer credit to cushion their underperformance but things might not be so easy to fix with your customers. If a vendor has repeatedly caused your business losses and there is no sign of them changing, it could be time to call it quit.
Vendor Management Q: Is a vendor negatively impacting efficiency?
Vendor management best practices only work when both vendors stick to the bargain. For the vendor, this includes following a strict delivery timetable, communicating promptly and clearly no delays and generally giving status updates before prompting. A vendor that keeps you in the dark causes your business leader undue stress – constantly asking for information, awaiting responses and missed calls that are never returned. Would you be able to tell when such a vendor closes shop or changes their processes? There is really no reason to wait for the worst to happen, it may be time to count your losses and move on.
Vendor Management Q: Is a vendor destroying your brand?
In this age when consumers can access information instantly using their smartphones, business owners need to have checks and balances with those that directly influence their operations. Before getting into vendor contracts, it would be a good idea to sign a conduct contract. An existing vendor without a formal contract but who is making headlines for the wrong reasons has the potential to drag your brand along. Vendor management in such a case would call for public action to distance your business from the mess they are in.
When reviewing how well you are doing in vendor management, consider the value you receive in terms of your vendors being clear and straightforward. Cost is much more than the monetary significance that a vendor relationship is bringing into a business. If the focus is on that and not on empathizing with the aftermath, the decision to let go of underperformers will not be too hard to make.
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