Vendor risk Management - “Ensures Value for Money & Manages Complex Risk”.

Authored by Usman Ghani

Vendor Management plays strategic role in supply chain efficiency. Managing vendors can increase cash flows, provide excellent service,improve reliability of supply it also helps in reducing reliance on capital assets and can be an alternate source.

Companies can greatly be benefited by implementing Vendor Management:

1. Increased Efficiency : Many Companies have been slow in there procurement process having vendor risk management solution can help them and can increase efficiency knowing that which supplier will provide products timely.Vendor Management System also reduce the time and effort that is invested on suppliers by automating  and standardize all web based procedures.it has also a positive impact on suppliers by receiving auto alerts on expressing their interests. 

2. Fewer Vendors: By implementing the Vendor Risk Management it also strandize the pre-qualification criteria for suppliers which ultimately reduce the number of vendor and also the risk of supply chain.vendor risk management also signifies the third party involvement in the process can least the headaches and also narrow the number of vendors you are purchasing from.

3. Faster Deals: Researching and negotiating with several vendors to find the best one most cost effective for your company will lead to time management so with the help of risk scorecards and automated intelligence reports company can find the best one which suits the requirements.

4.Quick Compliance: procurement does not find that how supplier is not following the regulatory standards.besides potential monetary penalties and supply disruption your company will take time to find another vendor. Vendor risk management takes the guesswork out of our supply chain by establishing if the third party is following the relevant compliance standards and giving your company that information before striking a deal.

5.Increased Out Sourcing: Increased outsourcing like goods and services from vendors instead of producing things by yourself.

6. Faster Annual reviews: Conduct Annual Reviews of your vendors in order to maintain compliance.Better procurement is at vendor risk management the quicker and more painless review process will be for the company and for the supplier.

A company that successfully implement the strategic vendor performance management and also ensures that the suppliers performance meet the expectations i:e defined in the contract and against the market.Companies getting more dependent on the performance of strategic vendor.

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