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Best Practices and Trends in Vendor Management

1-Day Seminar

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"Many authors and experts note that CIOs who are grappling with an increasingly complex marketplace are finding relief—and better relationships with vendors by forming VMOs."

Vendor relationship management has become an important competency. Procurement organizations are recognizing the need to transition from buyers to relationship strategist.

One size does not fit all. Cultures are different. Staffing is different. Markets are different. Cost structures are different. Some companies are international. Others are domestic. Private settings and public settings differ. Yet, while there are apparent differences, there are some basic processes and disciplines that can be adapted and deployed by all.

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Learn Best Practices and Trends

Click here for a print friendly course outline

In this one day Caucus Local Meeting we will discuss best-practices and trends in vendor management, including

  • What is some of the research saying?
  • How should vendor management be approached?
  • What is a Vendor Management Office and when would one make sense?
  • Vendor alliances are trends, but the success rate has been less than stellar. Why is that?
  • Staff competencies and skills are changing along with commensurate approaches to career-pathing.

The afternoon will include an interactive hands-on vendor management workshop based upon seven keys of implementation—including sponsorship, contract management, vendor score carding, and vendor segmentation.

Takeaways will include a sampling of templates, documents, and forms which can become a part of your document library. Caucus members also have an extensive document library available to them at the Caucus website.


Course Outline

1. Objectives

  1. Overview of vendor management programs
  2. How does this fit with your company
  3. What skills are changing for the sourcing professional
  4. Explore some core competencies
  5. Share examples of some of the tools being used
  6. Exchange ideas and experiences with colleagues
  7. Describe some key deliverables
  8. What are other companies doing
  9. What do some of the experts say

2. Topics

  1. Challenges and opportunities
  2. Financial Management
  3. Risk management
  4. Tightened governances
  5. Identifying key vendors
  6. Measurements
  7. Vendor Management Office
  8. VMO organization and staffing
  9. Benchmarking
  10. Value Initiatives
  11. Recognition
  12. Branding and Communication

3. Vendor management is driven by goals and strategy

  1. Custom built programs
  2. Companies vary
  3. Affordability and practical fit
  4. Recognize this is an evolution—ever repeating
  5. Vendor management needs enterprise support
  6. Requires resources

4. Leading companies are focusing on key supplier relationships

  1. Integrating supplier management programs is becoming a corporate requirement
  2. Companies are improving supplier performance gains by focusing on measuring and monitoring.

5. Some of our challenges

  1. Vendors know more about us than we do
  2. Vendors managing us
  3. Information leakage
  4. Inadequate processes
  5. Products do not perform to expectations
  6. Unmanaged service levels
  7. Lack of responsiveness
  8. Payment inaccuracies
  9. We give away leverage
  10. We select, then negotiate
  11. Takes too long

6. Opportunities

  1. Establish internal alignment
  2. Improve total cost of ownership
  3. Consistent vendor treatment
  4. Improve our processes
  5. Positive customer/vendor collaborations
  6. Mutual innovations

7. Financial Management

  1. Hard dollar savings
  2. Soft dollar savings
  3. Captured savings
  4. Total amount under contract
  5. Total sourceable spend
  6. Sourcable spend being managed
  7. Amount of maverick spending
  8. A/P closed within contract terms
  9. Normalize spend data base
  10. Auditing spend and payments
  11. Validate savings
  12. Captured savings vs projected savings

8. Managing Risks

  1. Contracting Strategies (include)
    • Companywide standardized procedures
    • Establish centralized repository
    • Standardized clauses
    • Use your contracts
    • Electronic capture
    • Automated early warnings (dates, owners…)
    • Planning and preparation time

  2. Risk reporting
    • Lawsuits
    • Government actions
    • Supplier market
    • Supplier strength inside their market
    • Delivery of product and service risks
    • Supplier attention to business interruption
    • Risk reporting
    • Supplier relationship status
    • Contract status
    • Financials (ratios)
    • Customer satisfaction
    • Vendor market position

9. Tightened Governances

  1. Policies
  2. Processes
  3. Standards
  4. Documents
  5. Rules of engagement
  6. Issues
    • Need to tighten governances
    • Inconsistency
    • Favoritism
    • Emotion driven
    • Inadequate processes
    • Policies not working
    • Once in, never out (and they know it)

10. Identify strategic vendors

  1. Tier 1, Tier 2, Tier 3
  2. Category management
  3. Focus
  4. Tiering vendors gives tremendous leverage

11. Vendor Measurements and scorecards

  1. Performance Management
  2. Service Level Agreements
  3. Key Performance Indicators
  4. Performance reviews
  5. Open Issue management
  6. Scorecards
  7. Dashboards
  8. Caucus Vendor Scorecard
  9. Other score card models

12. Vendor Management Office

  1. What are VMOs?
  2. Who is doing them?
  3. Are they really something new?
  4. What’s in a name?
  5. Beware of the Pitfalls

13. VMO Approaches

  1. Models
  2. Operating as virtual teams
  3. Cross functional teaming is critical (including)
  4. Executives
  5. Strategic sourcing
  6. Subject matter experts
  7. Information technology
  8. Standard setting bodies

14. Organization and structure

  1. Governing councils
  2. Standard setting bodies
  3. Cross functional teaming is critical
  4. Vendor Management Officer
  5. Relationship Manager
  6. Relationship Owner
  7. Natural Owner
  8. Product Owner
  9. Services Owner
  10. Category Leader

15. Vendor Management Internal Measurements

  1. What are others measuring?
  2. How many sourcing professionals on staff?
  3. How many contracts per sourcing staff?
  4. How many contract administrators?
  5. What are savings goals?

16. Value Initiatives

  1. Supplier development
  2. Supplier quality circles
  3. Internal training
  4. Information sharing
  5. Written supplier strategy
  6. Reduce spend
  7. Eliminate waste
  8. JIT inventories
  9. Lowering TCO
  10. Lean thinking

17. Branding and Communication

  1. Celebrate successes
  2. Recognize teammates
  3. Branding and Communication
  4. Credentialing
  5. Media
  6. Surveys
  7. Personal Branding
  8. What is changing for the sourcing professional?
  9. Making a difference is the theme
  10. Executives
  11. Clients

18. Summary Thoughts

  1. Align vendor management with organization
  2. Recruit, select and train competent staffing
  3. Establish strategic sourcing
  4. Appoint relationship managers
  5. Identify key vendors
  6. Adopt risk management program
  7. Optimize company assets
  8. Update governances
  9. Executive sponsorship
  10. Executive participation
  11. Know your spend (data cube)
  12. Cross functional teams are essential
  13. Job re-definition necessary
  14. Consistency
  15. Individual accountability
  16. Supplier training
  17. Internal training

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