Vendor Management Program
This proprietary process shows you how to manage your
vendors & pay less for the goods and services that you buy.
JDHSG’s Vendor Management Program (VMP), shows clients how to manage their vendors and pay less for the goods and services they buy. The core of our VMP has been developed and enhanced over the last twenty-five years and is a field proven solution. By having a third party keep a close eye on all active contracts, cost saving and efficiency opportunities don’t “slip through the cracks”. Often times, when a company notices a contract is about to expire, there isn’t sufficient time to consider alternative options. Those options could be, but are not limited to: vendor consolidation, a study of what a new vendor(s) may be able to offer, and significant cost savings.
A great feature of the VMP is that it is based on a building block approach to allow the client to begin implementation one step at a time and to incrementally add-on additional purchasing categories when ready.
Benefits
The benefits to our clients are substantial. Here are a few select examples:
1. Client will have a process in place for contract compliance, with the ability to easily audit vendor invoices to validate that client is getting the agreed upon pricing from the vendors.
2. Client will have a process in place to monitor the terms and conditions of the agreement, e.g. performance and quality guarantees.
3. Client will have a central repository for all vendor agreements. Having the ability to monitor the contract expiration dates, Client will be able to properly plan for the next contract bid process. This allows for a smarter assessment of when/how future procurement purchases should be made.
4. Client will have a process in place to effectively monitor the sourcing category, evaluate alternative solutions, and monitor vendor trends.
5. Client will have a process in place to maintain a constant read on the amount of LEVERAGE Client has within a given category.
6. Client will have a VMP process in place to manage existing vendor relationships and evaluate alternative vendors.
7. Client will be prepared to identify and prioritize projects that are JDHSG centric, client centric, and no immediate action.
Detriments of not installing a VMP
1. Small issues with the vendors can go unnoticed, and over time become major issues.
2. Upcoming contract expiration dates may go un-noticed. This could potentially hinder the opportunity for a robust bidding process that could have enhanced the overall vendor deliverable, and could have significantly reduced cost.
3. The teams responsible for procuring goods and services remain uneducated, and continue to make the same mistakes. A vendor management program would empower the purchasers to set up the contract/relationship properly the first time. This is just as much of a benefit to the vendor as it is client.
4. Overpaying or being stuck in an unfavorable agreement can create a tug-of-war with top line revenue growth. Keep in mind that for every hard dollar saved (whether it be from lower unit-pricing or through not having to deal with continued performance issues) is essentially a dollar added to the top line. This makes the company healthier, and creates a competitive edge amongst your peer group.