Vendor Relationship Management

Many organizations fail to realize the strategic value in proactively managing their relationships with suppliers. Suppliers bring more to the relationship than the specific product or service being purchased as they are also valuable sources of information such as market analysis, leading practices and competitive insights. Suppliers are able to be an extension of your organization at any point on your value chain if you engage creatively and collaboratively.

Categorizing Suppliers

Strategic supplier management involves first categorizing suppliers by strategic importance. This is normally done by spend with supplier and a second factor usually aligned to strategic objectives.


Supplier Key Performance Indicators (KPI’s) aligned to specific objectives, need to be measurable, are then developed and communicated to the suppliers as part of the service level agreement. KPI’s can be categorized as:


Supply Chain Agility and Responsiveness Through Collaboration

Modern supply chains require greater flexibility than ever which means the ability to adapt to sudden changes in demand and short product life cycles. Where once a supply chain was a pipeline of inventory of the same product being pushed to market; the modern supply chain does not carry inventory but rather information. The carrying and sharing of information between customers, suppliers and suppliers to the suppliers enables planning to the same objectives and greater responsiveness to changing customer desires faster than before. Today the customer is dictating what they want as opposed to buying what the provider has to offer.

So how do we make supply chains more responsive?

The first is the sharing of information through collaborative Planning Foecasting and Replenishment otherwise known as CPFR.

- Supply chain efficiency can be improved through collaborative planning as it develops synchronization and a synchronized supply chain is one continuous network as opposed to a series of islands. (Christopher; 2005)

- Developing synchronization requires all strategy, decisions and performance measurements be made for the benefit of the entire supply chain as opposed to separate organizations. (Helms, Ettkin, Chapman; 2000)

- The sharing of information among all organizations enables each to plan capacity and inventory based on the same data. (Chopra and Meindl; 2010)

Supply Chain Agility and Responsiveness Through Collaboration

When organizations within a supply chain plan independently, resources and capacity will not be aligned creating bottlenecks in some areas and over capacity in other areas. (Chopra, Meindl; 2010) This affects the ability of the supply chain to be responsive to customer demand and also affects the overall profitability of the supply chain. The benefits of a collaborative supply chain are:

  • Increased responsiveness within the supply chain through increased availability of the correct product;

  • Optimized inventory levels as organizations do not build inventory in defense of inaccuracies therefore reducing the inventory levels throughout the supply chain;

  • Greater product availability as organizations are able to provide more of the correct product in the distribution channel as inventory dollars are not allocated to slow moving products;

  • Greater profitability for the supply chain due to higher revenues from reduced lost sales and lower operating costs through inventory, expediting fees and obsolescence costs.

  • Much of the benefits come through eliminating the Bull Whip Effect on upstream organizations as dramatic changes in demand will decrease reducing distortions and increasing confidence from upstream suppliers. (Chopra, Meindl; 2010)

A synchronized supply chain is best planned from the customer back through the supply chain where the customer demand data and forecast is shared among all organizations. In turn, this leads to greater responsiveness and greater overall profitability through increased revenues and reduced risk and operational costs as organizations are better equipped to accommodate sudden demand changes and shorter product life cycles.

Leading Practices

Strategic supplier management involves first categorizing suppliers by strategic importance. This is normally done by spend with supplier and a second factor usually aligned to strategic objectives.

  • Segmentation of supply base into strategic and non-strategic vendors.

  • Pre-qualification of strategic vendors based on vendor capabilities and strengths.

  • Implementation of a formal vendor certification, performance tracking and recognition program.

  • Classify vendors through strategic importance, spendcategory characteristics, size of spend and sophistication of capabilities.

  • Supplier self-service for invoicing and standard inquiries performed via web-based tools.

  • Pre-approved contract templates and terms.  Integrated contract management system.

  • Supplier relationship management process addresses supplier contract compliance based on segmentation of the supply base (i.e. strategic versus commodity suppliers).

  • Intensive communication, internally and with suppliers, of expectations and responsibilities throughout the lifecycle of a contract.


"Mark was one of my leaders. We faced an Operation that was too cost heavy, couldn’t ship on time and was costing the company market share. Mark took ownership over the challenges we faced in our supply chain. He led efforts to re-organize and structure our vendors and supply chain. He created new sourcing models and led efforts with Design Engineering to apply ‘design for sourcing’ approaches resulting in substantial material cost reductions. Mark applied innovative approaches from 3PL, Lean Delivery approaches and outsourcing to lower cost providers both in North America and Far East. This helped us achieve a very quick turn-around to profitability. Mark also provided me a versatility to manage multiple functions and always displayed a strong team-player character."

Purchasing Manager
Leitch Technology
Vice President Operations

" Mark is one of a kind procurement and supply chain professional, his expertise, talent, business attitude and behaviour are exceptional. He is very knowledgeable and up-to-date in terms of the market trends and best practices, he is a very good listener and provides the best fit advice to A specific situation. It was great working with him, and he is on my top 5 consultants that I would approach for the next procurement and supply chain related project."

Manager, Consulting
Deloitte Consulting, Strategy and Operations
Client – Wireless Industry

"I worked with Mark at Rogers where he was the Director of Strategic Sourcing managing the Network, Engineering, Cable and Wireless team. Mark is seasoned procurement professional with a deep understanding of all facets of the supply chain. Mark was an empowering leader, able to articulate clearly the vision and strategy for his category while motivating his team to deliver excellence. Mark is methodical, detail oriented and passionate about exceeding expectations. I would welcome the opportunity to work with Mark again."

Director, Strategic Sourcing
Rogers Communications
Director Strategic Sourcing, IT

"Mark is truly an outstanding professional with expert knowledge in strategic sourcing both within manufacturing and Service oriented environments. I had the good fortune of working with Mark both as a client and successfully placing him as a candidate. Mark is strategic, a visionary and dedicated coupled with an outstanding sense of humor! I would without hesitation recommend Mark."


"Mark is a great mentor for any one new to a career in strategic sourcing. He is a fair person who is very knowledgeable in the electronics industry. His knowledge is not limited just to the electronics industry but other industries such as finance. His management style will allow anyone who works with him to succeed as he encourages his co-workers and his direct reports to constantly improve."

Commodity Manager (Staff)
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