VENDOR MANAGEMENT:

THE PROCESS THAT EMPOWERS AN ORGANISATION TO TAKE APPROPRIATE MEASURES FOR

CONTROLLING COST, REDUCING POTENTIAL RISKS RELATED TO VENDORS, ENSURING EXCELLENT
SERVICE DELIVERABILITY AND DERIVING VALUE FROM VENDORS IN THE LONG RUN.

 Finding vendors

 RFI, RFP, or RFQ uploading and responses

 Vendor bidding and auctions
 Vendor evaluation
 Negotiations
 Contracts
 Document repositories and communications

 VENDOR / SUPPLIER SELECTION:

1. PRICE
2. QUALITY : DELIVERY OF QUALITY GOODS AND SERVICE
3. FINANCIAL HEALTH
4. MODE OF PAYMENT
5. PAST PERFORMANCE RECORD / PROJECT COMPLETION CERTIFICATE
 SUPPLIER EVALUATION CRITERION:
1. PRICE, QUALITY, & DELIVERY
2. MANAGEMENT CAPABILITY
3. EMPLOYEES CAPABILITIES
4. COST STRUCTURE
5. TOTAL QUALITY PERFORMANCE SYSTEMS AND PHILOSOPHY
6. PROCESS AND TECHNOLOGICAL CAPABILITIES
7. GEOGRAPHICAL FACTOR
8. ENVIRONMENTAL AND SAFETY COMPLIANCES
9. FINANCIAL STABILITY
10. PRODUCTION SCHEDULING AND CONTROL SYSTEMS
11. SUPPLIER SOURCING CAPABILITY
12. LONG TERM RELATIONSHIP POTENTIAL
 TERMS:

RFI: REQUEST FOR INFORMATION

RFP: REQUEST FOR PROPOSAL

RFQ: REQUEST FOR QUOTE

IFB: INVITATION OF BID

LOI: LETTER OF INTENT

PO: PURCHASE ORDER

ARC: ANNUAL RATE OF CONTRACT

What is a Vendor?
A vendor is a seller of products and services, including inventory, office supplies, equipment,
and janitorial services, to businesses or individual customers. A vendor may be referred to as
a supplier. The selected vendor completes a sale or service, collects immediate payment, or
invoices its customers with credit terms for later payment, and delivers goods to the
purchaser.

What is the Vendor Selection Process?

The vendor selection process is a series of procurement steps to determine product or service
requirements and match them with vendor capabilities and pricing. It includes identifying
potential vendors, obtaining quotes or proposals with competitive bids, evaluating vendors by
contacting references and applying a company’s vendor selection criteria checklist, and
contracting.

Vendor Selection Criteria

11 vendor selection criteria:

1. Quality product or service, meeting any technical specifications

2. Value with reasonable cost and terms
3. Transportation costs
4. Discounts for volume and early payment
5. On-time delivery
6. Financial strength
7. Excellent customer references
8. Customer service
9. Trustworthy
10. Regulatory compliance
11. ESG sustainability