1. Meaning: Vendor management is the process of finding, qualifying and doing business with vendors.
2. Activities: Common activities of vendor management include researching vendors, negotiating contracts, obtaining quotes, evaluating performance, creating and updating vendor files, and ensuring that payments are made properly.
3. Outsourcing: Vendor management begins with the decision of outsourcing.
4. Finding vendors: The company then have to find one or more vendors that can supply the good or service needed.
5. Evaluation of vendors: Next thing is to evaluate each vendor based on pricing, capabilities, turn-around time, quality of work, etc. This involves requesting pricing, checking references, and researching the company through online resources.
6. Contract: After vendors are selected, contract terms are followed. Certain vendors might be preferred. Others might be backup vendors in case of further requirement
7. Vendor files: It often involves a great deal of electronic or manual paperwork. As it include vendor contact information, certificates of insurance and taxpayer identification numbers. Many firms require vendor files to be updated annually in such case it is ensured to obtain the details every year.
