Choosing suppliers can take a huge amount of time and effort. To speed up the process, many companies develop a list of preferred vendors. These are the “superstar” suppliers you have thoroughly assessed and reviewed, and are willing to negotiate with on your terms.
Curating a Preferred Vendor List
By focusing on just a few selected suppliers, you can streamline purchasing overheads. You can also negotiate advantageous pricing and reduce upfront costs by improving payment terms.
“A-list” vendors typically have a better understanding of your business. They are aware of your expectations and how to fulfill your needs. They communicate honestly when problems arise and don’t get hung up on paperwork and bureaucracy. As a result, you can avoid many potential headaches and switching vendors so frequently, especially when something unexpected happens.
Maintaining good relationships with your vendors is crucial. Trustworthy suppliers can become advocates for your firm. They are also highly reliable, which can help keep inventory levels low and customer satisfaction high. With that said, it’s important to review the preferred vendor list regularly and make necessary adjustments or replacements of under-performing vendors. The right vendors will be able to move with your company as it changes and grows.
Keeping the Downsides in Mind
Even though a preferred vendor list can help simplify purchasing and give you a sense of stability and continuity in supply, many people argue that a modern business shouldn’t restrict itself to just one or two suppliers.
Indeed, most organizations rigidly follow a supplier criteria checklist and leave no room for flexibility. Moreover, individuals who decide which vendors go on the list are often too far removed from the core business needs and project delivery to fully understand the selection criteria in isolation.
Creating a vendor list requires a substantial amount of time and effort. To do your homework well, you should put in the energy to get the best results. Gather detailed and accurate information from potential vendors to get a better picture of which types of vendors your company needs the most. Likewise, you should be willing to innovate and make changes within your list.
The extra work of curating a list is worth the extra effort. If you do decide to create a preferred vendor list for the advantages of trust and reliability, make sure to allow some adaptability to new vendors. Don’t limit your options. Being cost-effective is good, but it’s more important to measure the long-term value a supplier delivers. This will help you choose the best suppliers to drive your business forward and save you from those sleepless nights spent thinking about your procurement pain.