Traditional procurement organizations are tasked with getting the best value, price being a huge determinant of what is considered "best-value". Vendor management practices are few and far in between, especially in smaller organizations without a long-term strategy for operational excellence.

When companies implement a vendor management office, they can immediately streamline their procurement practices. A vendor management office allows companies to get not only better pricing but also allows them to form better vendor relationships. And when vendors become "partners-in-success", that's when operational excellence is achieved in companies small and large.

Some key vendor management strategies are simple and easy to implement:

• Share Information: For companies looking for  operational excellence, sharing information with vendors is very important. Every company has to determine what information can be best shared without disclosing proprietary data with vendors. However sharing information such as plans for new product launches, design changes, and expansion plans are all common data elements that may be shared with vendors.
  
  
• Focus on Partnership: It's a two-way street when vendors become partners. They want you to commit to them just as much as you want them to be committed to you. Beating up your vendors for best price won't be the strategy to follow but neither is accepting whatever they propose. Competitive bidding still works but collaborating with vendors to increase participation and competition is a good way of ensuring fair contract negotiation practices.
  
  
• Build relationships: In the good old days, we told our vendors what to do and they did it. Now, it makes more sense to ask them to participate and invite them in brainstorming sessions where key personnel can explore ways to do things better, faster, less expensively. Build relationships whereby vendors want to come to these sessions to share new products, services, and strategies to improve your organization.
  
  
• Make it a win-win relationship: At some point, there's a diminshing return when asking vendors to cut costs, cut costs, cut costs. Either the vendor/s will go out of business, or will be non-cooperative, or you will go out and find someone who may be cheaper but not quite as skilled or experienced. So talk to your vendors and find out how they can give you what you need without just focusing on lower-cost year after year. Perhaps they can provide additional services, perhaps they can help reengineer processes. Whatever the situation, ask vendors to help you rather than tell them that their viability is only based on the cost they provide.