You are a Procurement Professional and seeking to define which vendors are High-Performance Vendors and which vendors are not.
Within a taskforce, you can determine what the key Criteria are which you can align with your Vendors in the future to keep company standard and develop the vendors who do not fall under the given criteria.
As the basic in actually being able to deliver what is defined within the contract, you should also find other criteria, where you should be able to cluster which Vendors are good and which Vendors are not. Of course, you might have already developed a Vendor Pyramid, which also considers Blacklist Vendors, Intermediate Vendors, Strategic Vendors etc.
3 Key Criteria to Choosing Your High Performance Vendor Rapidly
If you haven’t and you are about to challenge the current Vendor structure within the organisation in a short period to conclude a project you have the following key criteria which you should watch out for:
1.Reliability & Consistency
Does the Vendor on-time and what is stated in the agreement? Does this align with the contractor are there variances.
For example, when I worked as a Procurement Consultant in a Project, the aim was that the Vendor delivers office material in 2 weeks, with the agreed prices after negotiation and with a 100% quality, meaning that the material should not have any defects.
This was delivered by the vendor and received regarding scoring an optimum on points. This needs to be monitored in a set period, e.g. for one quarter for example, and the Vendor performance needs to be checked in an Excel file or other Vendor Performance Tools which your organisation provides.
2.Innovation & Entrepreneurship
Does your Vendor also deliver new ideas to the project team on a regular basis? Do your products your organization sell have high impacts on the market because your Vendor is providing performance by sharing best-practices and showing benchmarks which raises or sales or reduces your costs.
For example, a Vendor which is about to provide a management consulting concept in the pharma sector to increase the sales channels of drugstores on the Dutch market. Sharing practices from other reference projects which should support the right consulting methodologies, so the project team from the client understands the critical issues and delivers the aims within the budget frame.
Here the interaction with your Internal Buyer is essential and monitor the performance from the Vendors. Aim to have a weekly meeting with the Internal Buyers which work with the Vendors with the highest spend and receive open feedback on their performance. Some sub-criteria could be Development of Solution Sortiment, Availability to share information as Best-Practice Information, Cross-Selling Opportunities and strategies on how to deliver this.
3.Flexibility in Delivering the Solutions Timely and in Quality
How does your Vendor offer solutions, which are not planned but you need the Vendor to provide a Solution? This does not only consider the Product but also a Service which can be delivered in short-term by the taskforce from the Vendor.
For example, an upgrade of hosting an SAAS Platform instead of 08:00 a.m.-17:00 p.m. to 24-7, with the given Premium Support from the Vendor. Here the central question is: how quickly can this be delivered by the Vendor? How effective is the communication from the Vendor with the Customer and how can this switch cause the smallest impacts on the total cost of ownership costs.
Here again, you can monitor this with your Internal Buyer in taking the leading Vendors into account and setting joined criteria and following them in a time frame of 1 quarter. Possible criteria are: Support time switch, fastening delivery, raising the payment terms or decreasing the running prices as there is a reduction in market share for the current year.
Once you have all the information in, make sure that you make a final report and deliver this to the task force.
If you would like to deliver a joined Programme on how to achieve this within your organization, please feel free to contact me: https://www.linkedin.com/in/philipdavidconsulting/
I provide One-to-One Coaching for Procurement Professionals and lead On-site Projects in the area of Sourcing and Procurement as a Consultant.
Good luck with your further Procurement activities!
With best regards from Vienna,
Philip
