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How can an organization manage its suppliers effectively?

Effective vendor management entails being proactive right from the beginning of the supplier cycle. It begins as organizations assess potential suppliers and their past performances against organizational standards and develop a consolidated list. Procurement teams then have to ensure that they acquire products and services from those suppliers only. This is done through careful approval routing and enhanced in-house communication. 

Communication with suppliers needs to be clear and quick as well. Vendor performances have to be carefully tracked through several KPIs as they deliver the products to ensure that the organization is making the most out of its investment. Mutually beneficial relationships need to be encouraged if the supplier performs well. 

Good supplier management also includes segmenting suppliers based on their criticality to the organization to ensure that backup plans are prepared in case the supply chain gets disrupted. Risks have to be assessed continuously too. Organizations typically use supplier management software to streamline the processes involved.