How Grocers Can Unlock Successful Vendor Management
When you’re looking at ways to improve and grow your business, you probably think first about customers, and how to attract and retain them. But there’s another type of relationship that’s just as vital to your success as that with customers: your relationship with your vendors and suppliers. Without products on your shelves or ingredients to make your foodservice dishes, your business is going nowhere. It’s well worth investing some time and effort into vendor management, particularly in these areas:
1. Relationship Building
Finding the right people with whom you can create long-term partnerships should be the primary goal of vendor management. Being concerned just with finding the lowest price and skipping around among vendors to save a buck now and then is ultimately not cost-effective, and product quality will suffer. Get competitive bids, sure, but don’t let that be the sole deciding factor. Look for reliability and someone who shares your standards of value, and commit to that. Established, trusted relationships can also yield preferential treatment and access to inside expertise.
Ask questions about your vendor’s business to build the relationship. Understanding their processes and challenges will give you insight into their pricing – remember, they need to make a profit, too. Knowledge of their perspective will also help you to negotiate win-win agreements and ensure that the relationship is mutually beneficial.
Good communication is an essential element of any successful relationship in life. You want to make sure that all of your vendors are on the same page when it comes to your rules and expectations, so written guidelines and regular meetings are both helpful. Give your suppliers the information they need to provide you the best service. For example, you might share information about planned marketing campaigns, customer insights, or your intention to expand or relocate, and the vendor’s knowledge of the product might be useful to your plans or even give you a competitive advantage.
3. Performance Evaluation
Another important type of communication in vendor management is performance evaluation. When you make a contract with a vendor, you’ll need to decide how you will define and measure quality of the delivered product or service; communicate those expectations to the supplier; and give periodic feedback on how well they are meeting (or exceeding) those expectations. Are they delivering on time? Is product quality consistent and up to your standards? Constructive criticism can help vendors improve their business. And acknowledging a job well done strengthens the relationship.
4. Put the Right Software Tools in Place
These key aspects of vendor management can get an assist from technology. There are software solutions you can leverage to increase supply chain visibility, improve communication, reduce risk and increase efficiency. For example, a good inventory control program can allow you to automatically contact your vendors when you need to reorder products.
The best vendor relationships result from thoughtful cultivation. When it’s done right, you gain a partnership that benefits both businesses for the long term.