Vendor Management in Projects
Businesses frequently rely on other businesses to complete projects. Selecting vendors for particular projects requires research, a bidding process and open communication. Establishing a long-term regular relationship with select vendors involves awarding multiple jobs based on a combination of performance, reliability, positive feedback, cost efficiency and a stellar track record of job turnaround time.
Other People Are Reading
-
Purpose of Vendors
-
When a business recognizes a need that it is unable to fulfill with its own in-house resources, then it typically seeks out another company to fill that need. Companies in industries such as commercial property management have many repair and maintenance needs that arise on a daily basis, such as roof and air conditioning repair. A commercial property management company may have a small maintenance staff that can perform light maintenance for routine jobs that occur at properties located near the main office. Larger jobs that require additional technical skills or are located miles from the company's main office are entrusted to local vendors in order to speed up completion time and ensure quality.
Vendor Selection Process
-
The vendor selection process originates when a company recognizes a gap between internal resources and a job that must be done. Representatives will ask potential vendors to submit a request for proposal (RFP). An RFP is where potential bidders outline what work they will perform, how they will perform it and what their pricing structure is. The company that solicited the bids will then evaluate each bid, check the potential vendor's references and make a final selection.
-
Relationship Management
-
Once a vendor has been given the approval to perform a project, a company must manage and track the project's progress. When a company uses multiple vendors for various projects, then constructing a project flowchart will help organize the process. Following up with each vendor on the progress and completion of each job is critical. Soliciting feedback on the vendor's performance either through third-party observation or first-person monitoring is another crucial step.
Vendor Diversification
-
Relying on one vendor for a series of similar jobs is sometimes detrimental to cost efficiency and performance. A company must alternate similar vendors between jobs in order to increase competitive pricing as well as job quality. In addition, having a backup ensures the job will be completed if the main vendor is unable to perform.
-
References
- Photo Credit Jupiterimages/Comstock/Getty Images
