Vendor review is important in getting the most out of your vendor relationships.
Importance Of Vendors
In whatever field of business that you may be in, it does not matter. Vendors or third-party suppliers all play the significance of growth in your business. Because actually, you cannot run your business without them. So there is this what we call ‘dependency’ in between.
However, instead of viewing this relationship as mutually beneficial. Some businesses tend to see this as combative. It is sad but this is true. And as a result, this often brings the poor performance of services.
Moreover, always remember this formula. If you are going to bargain on pricing, you may save. But in reality, it may bargain the quality of their services or product brings. So be mindful of the quality. Rather than the quantity, it brings.
So what are the tips and techniques that can help you?
Set A Criteria Of Value
Setting these criteria should be done before any vendor partnership. However, it’s never yet too late to establish one.
Moreover, focus on the type of quality you think a good vendor is. Also, do the assessment on a regular basis. Consider the following suggestions:
- Set a regular time (Monthly, Quarterly, Annually) in assessing your vendors
- Consider the vendor’s business size. Also, the number of certifications, and the reviews they receive.
- Also, take note if they are organized with their procedures. For instance, do they have proper documentation of your transactions?
Classify & Organize
This is especially helpful if you are connected with a huge number of suppliers or vendors. Also, imagine that you are to assess each one of them. That is a tedious, and complex task.
Thus, good classification in this regard is a great help. For example, classify them according to their criticality levels. Also, you can take into consideration the impact they bring. Like, ‘what effect do they bring into your business operations’?
Set A Standard Method Of Evaluation
Another organized way is setting your official method of vendor evaluation. Several techniques are available in rating them.
- System metrics
- Software applications
- Survey forms
- Evaluation forms
Getting integrated with software applications is a fast and advanced way. For example, you can customize a program specifically designed for this.
Another option is to pass out survey forms to your employees. However, this may be tedious. But if you’re going to have this in a more advanced way. Like doing it online, it may be beneficial too.
Select Point Persons For Review
After gathering data of your vendor or supplier reviews. Now it’s time for assessment.
As mentioned earlier, it is highly suggested to classify vendors into levels. So, according to level, choose the assigned person to evaluate.
For instance, level 1 or most high-risk levels should be reviewed by the Chief Financial Officer. Or someone responsible with the best qualifications for reviewing. The same process goes with the other levels.
You may have more ways to optimize your vendor reviews. However, always aim for good relationships. This goes a long way in all aspects of life.
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