Efficient Vendor Management to Increase Your Company's Performance
SME World|July 2021
India is now one of the fastest growing economies in the world. The recent interventions in industrial growth coupled with thriving government policy push, have helped Indian companies to enhance their innovations and offerings and ensure higher productivities. In this process, organisations collaborate with several partners to ensure efficient outcomes. This brings us to a key business aspect, i.e., vendor management, the process of shortlisting and finalising vendors for a particular task/project.
Wilfred Sigler

The pool of vendors can expand to include partners for logistics, suppliers, manufacturers, technology support, distributors, and more. Vendors are crucial to an organisation's success. Hence, it's important to onboard the right ones. Why do companies need vendors? Often, it is easier to collaborate with an external expert rather than build that expertise in-house. This allows the company to focus better on their core offerings. It is time and cost effective and saves heavy investments in the form of research and development.

However, external vendors come with a wide range of risks – operational, compliance, financial and reputational among others. As companies work closely with vendors and there can be a lot of exchange of critical data, it is important that a systematic vendor assessment process is followed. A non evaluated vendor is always risky in the long run and thus, it's critical that companies take vendor evaluation seriously.

When selecting a vendor, it is important to do a thorough check on the vendor's background and past records to analyse their capabilities and if they are a right fit. While, this can be a time-consuming process and may sometimes need focused expertise, it needs to be a high priority task as lack of a proper assessment can cause huge risk to the partnering company. A vendor assessment guide is therefore a boon, especially for India's budding start-ups and MSMEs.

Key factors to consider when assessing a vendor

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