Realising Where to Start
To begin, you should first address whether you have a clear picture of your vendors within your business? If the answer is “no,” this is a great place to start. Before any progress can be made to the vendor assessment process, you need to be aware of what suppliers are working with your company and what goods and services they provide you. Without this data, you won’t know what you should be assessing! To address this, you should collect a list of your known vendors from procurement and add them to your vendor register. Key information such as the goods and service vendors provide and contact should be recorded.
Now you have your list, we should address the elephant in the room. You won’t have the option to assess all your vendors every year without a huge team. Therefore, it would help if you were aiming to get as close to 100% coverage of understanding your vendors while remaining realistic. Often businesses assess the top 25% of vendors by financial status, this is because there is usually a risk in the vendors you spend the most money with, and so we consider that a key factor. Although there are different angles to consider, we would suggest organisations developing a simple and repeatable strategy to quickly categorise vendors, often called a tiering assessment, to help with this.