Vendor Management: Its Importance for Companies
Vendor management comes under the purview of procurement management and is defined as the process undertaken by organizations to manage their different vendors. The number and nature of vendors used by an organization depend on the nature of the company's business and supply-related requirements.
Another way to define vendor management is undertaking various activities like selection, contract management, risk management, service or product delivery, and other allied activities. Key components of vendor management include vendor selection, contract negotiation, performanace management, vendor relationship management and risk management.
Most businesses integrate a vendor management system with their existing systems to reduce the manual efforts required to manage the suppliers, invoicing, and payments. With vendor management, companies can reduce their costs, provide better quality products and services, and ensure increased value from the vendor throughout the transaction.
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