To effectively reduce supplier risks, whether in terms of operations, unforeseen cost implications, or regulatory compliance, you need increased visibility. Vendor management can track your suppliers and provide the data you need to identify supplier risks so that you can take the necessary steps to mitigate them.
Relationship management is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with business partners (customers internal and external/ vendors/ outside agencies) RM systems are designed to compile information on customers across different channels – or points of contact between the customer and the company – which could include the company’s website, telephone, live chat, direct mail, marketing materials and social media.
Relationship management can be between a business and its customers (customer relationship management) or between a business and other businesses (business relationship management).
Why Companies Need Relationship Management?
Mitigate Risks: To effectively reduce supplier risks, whether in terms of operations, unforeseen cost implications, or regulatory compliance, you need increased visibility. Vendor management can track your suppliers and provide the data you need to identify supplier risks so you can take the necessary steps to mitigate them, or choose an alternative vendor. You can easily verify supplier information, such as qualifications and certifications, track performance, and even look into the supplier’s financials to get a broader picture of their risk level in order to protect your organization.
Optimize Performance: Once you have a supplier active in your vendor management system, you can track and measure performance against the contract. This will enable you to ensure optimal performance. The data you receive from tracking performance can signal challenges before they become problems and identify areas that may need improvements.
Reduce Costs: When you have increased visibility, you can see invisible costs that you can then better control in order to save on costs. Additionally, having strong relationships with your suppliers, due to effective procedures and processes thanks to vendor management can help you to negotiate better rates and have access to discounts and incentives that can increase your profit margin.
Create Loyal Relationships: Good vendors are hard to come by. If you’re working with excellent suppliers, you should be doing everything you can to strengthen your relationships with them in order to build loyalty. With effective supplier management, you can ensure efficiencies that lead to smooth processes, which can help you build the loyalty you need to keep your great suppliers as part of your supply chain for the long term.
Increase Administrative Efficiencies: Your vendor management program can significantly drive administrative efficiencies. As a central hub for vendor master data and record keeping, this program can cut down on duplication of data, loss of contracts and other information, administrative labour costs, and errors. Having one central place for all of your vendor data can help you manage your relationships with heightened efficiency, which your suppliers will appreciate.
Increase Onboarding Speed: The time and resources it takes to onboard new vendors can slow down your productivity and cost you money. But with supplier management, it’s a breeze to obtain all relevant vendor information, such as bank details, capability information, regulatory data, and capacity details and input it into the system in a fast and error-free way for approval. The quicker you can bring your vendors onboard, the quicker you can move through the procurement process and receive your goods or services so you can put them to use.
Protect Your Brand: Your company’s brand holds a lot of value. You do not want to tarnish it due to the actions of an unprofessional or unethical vendor. A supplier management program can provide you with the information you need, such as a supplier’s social and environmental standards, to reduce your risk of a serious incident stemming from a vendor’s actions.