Vendor Management Plan: Roles, Responsibilities, and KPIs

VENDOR MANAGEMENT PLAN
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Table of Contents
1. PURPOSE.................................................................................................................................................... 3
2. DEVELOPING A VENDOR MANAGEMENT PLAN.....................................................................3
2.1. Self-Assessment....................................................................................................................................... 3
2.2. Roles and Responsibilities..................................................................................................................... 4
2.3. Vendor Selection..................................................................................................................................... 4
3. VENDOR MANAGEMENT KPIs..........................................................................................................4
3.1. Spend Visibility....................................................................................................................................... 4
3.2. Vendor Segmentation............................................................................................................................ 5
3.3. Collaboration........................................................................................................................................... 5
3.4. Performance Management................................................................................................................... 5
3.5. Risk Management................................................................................................................................... 6
3.6. Balanced Scorecard................................................................................................................................ 6
4. REFERENCES............................................................................................................................................ 9
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1. PURPOSE
The venders are classified into three groups. The critical vendors, the important vendors and
the incidental vendors. The three categories of vendors must be well determined to ensure a
smooth flow of business process required of them. Usually vendor management is enhance a
strong relation with the suppliers and service providers leading to a strengthened business
relation. There are a number of factors to be considered for a successful vendor management
plan.
First is that the information should be shared as well as the priorities. Usually appropriate
vendor management provide the necessary information at the time to allow the vendors serve
the needs better. This information may include new product launches, forecast information,
changes in design or relocation changes. Secondly, the vendors should balance commitment
and competition. This will help the vendors in assisting and supporting the business
operations. Thirdly, the key vendors should be allowed to help in the strategizing of the
business operations. Inviting the vendors in strategic meetings that involve the product hey
are working with is necessary. The forth activity is that it is necessary to build long term
partnership with the vendors which is cost saving an impacts the quality of products and
services the venders are dealing with. Finally, the company and the vendors should have a
win-win agreement. The negotiation between the vendors and the organization should ensure
that their goals are achieved in the end of the partnership.
2. DEVELOPING A VENDOR MANAGEMENT PLAN
2.1. Self-Assessment
A vendor management plan is necessary in the organization as it will help a company in most
of its process. A vendor management plan helps a company identify all vendors that have
access to sensitive data or sensitive network. The vendor management plan will also help in
ranking vendors according to the level of risk associated with the relationship. This will help
different the three classifications of vendors that are involved in the business currently. They
include: The critical vendors, the important vendors and the incidental vendors. The vendor
management plan will also help to determine the vender resiliency against the threats.
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