Buying and selling seem like a daily usual task but it has evolved into a complex system due to geographical barriers and a competitive market. Connecting with the right seller (vendor) in a pool of diverse vendors selling the same product is a hectic hunt.

Digitization has made this process easy and cost-effective. With the help of a vendor management system, you can easily grab the best vendors for your company as it not only filters on pricing and quality of the products but also helps maintain long-term relationships with the vendors.

Technically, vendor management involves a multi-stage process of connecting and maintaining prudent relationships with the providers of the goods and services needed by the purchasing companies (buyers) to fulfill their daily operations and achieve the company’s goals.

Automated vendor management systems automate the end-to-end vendor management processes and integrate seamlessly with the existing procurement journey to achieve high value out of the vendor relationships.

Due to the diversity of stakeholders involved in the procurement process, the vendor management solutions are either specific niche-focused or delivered as an all-in-one solution. Amongst those wide varieties of segments of procurement tools, there are three types of vendor management systems required by every organization:

1. Vendor Relationship Package

With this package, you get support for all your vendor relationship issues. The vendor engagement package consists of tools that are tasked to manage the vendor relationships throughout the active procurement processes from the initial stage to the final closure, in a sustainable manner.

For example, you can view any vendor-related information on a centralized dashboard with real-time vendor activities updates. This enhances the efficiency of the vendor relationship management tools which further delivers the key benefits of improved quality and total ownership cost with full transparency.

It gives you full freedom to define the vendor engagement rules, create action plans, assign stakeholders, and formulate effective vendor engagement models through user-friendly communication channels like mobile apps, SMS, and Whatsapp.

2. Vendor Performance Solutions

Tracking the vendor’s weaknesses or strengths throughout the contract period of the procurement process is impossible at individual levels. With the vendor performance management solution, you can easily monitor the supplier’s performance and mitigate the inherent supply chain risks beforehand.

The vendor performance analytics feature allows the buyers to monitor orders, delivery quality, compliances, and other key vendor performance metrics. This helps the buyers to track the underperforming suppliers and proceed onboard with ease. Such a solution removes the source of future potential risk prior.

Also, the vendor performance management system conducts intelligent control assessments calculated based on the supplier’s inherent risk. It goes ahead and alerts the suppliers to address the residual risk contributors, calculated by the risk domain.

3. All-In-One Vendor Management Solutions

There are two core areas of the vendor management system:

• Vendor relationship management focuses purely on the relationship enhancement factors between the buyer and the vendors.
• Vendor performance management calculates potential supplier risk factors to mitigate those risks before any loss.

The all-in-one vendor management system comprehensively combines both the solutions, which becomes the smart choice for the buyers. Though opting for a vendor management solution focusing on just one part of the supplier lifecycle may be the only requirement, preferably you should opt for an end-to-end vendor management system. It allows the buyers to access the full spectrum of functionalities needed to extract maximum value from the vendors.

Also, there are other key features you must consider for your vendor management solution:

• Mobile sourcing of vendors
• User-friendly design
• Faster deployment of services
• Neither upfront nor high fixed costs
• Dedicated 24/7 technical support

Along with all these features, Procol provides the buyers a facility of both connecting with the buyer selected vendors and other best options available in the market.

Summary

Procurement is no more a hectic task for buyers. The vendor management systems have eased up the processes through automated procurement solutions for effective and business-friendly trading operations. For a specific task, there are certain vendor management solutions available - supplier relationship management, and supplier performance management, which are both buyer and seller-friendly. With Procol’s all-in-one vendor management solution the whole procurement lifecycle from hunting for suppliers to managing every intermediate step, closing the deal, and enhancing vendor-buyer relationships becomes quick and easy with the help of powerful in-built AI technology.