online business

Vendor Business

The Vendor Business Plan:Many companies manage their relationships with vendors without giving much thought to the investment required to achieve the desired objectives from working together. In fact, they often don't clarify their objectives beyond receiving delivery of products and/or services on schedule and within budget. Actually, this may be all that is required for a tactical, opportunistic relationship.For more strategic vendor partnerships, however, it may be helpful to develop a business plan that provides the framework for multiple initiatives between the partners over a longer time period. In this case, the plan should be no different from that for any major business venture in the company. The vendor business plan should contain a concise description of the investment to be made along with the metrics to be used to measure ROI (both quantitative and qualitative).

In some cases of strategic importance to the company, it may be useful to consider developing the vendor business plan jointly with the partner company or companies. Depending on the level of trust between the partners, this could be a good opportunity to clarify the "skin in the game" for both companies and possibly share the same metrics for success. The joint plan can help establish and/or reinforce key elements of a business alliance. For any sort of strategic alliance, it is vital that the partners understand both their own investment as well as the investment of the other party.The vendor business plan is more than a Gantt chart of scheduled tasks. product requirements along with a description of a proposed solution to those requirements. It also includes a financial summary of the investments required of both partners along with the financial returns to be shared. Additionally, it describes the resources required to implement, deliver, support, and service the joint product or solution. However, it does not need to be overly complex.

The "Living Plan": Regardless of whether the partners choose to develop a joint business plan or separate plans, it is vital that the plan be reviewed, discussed, and updated on a regular basis. As business conditions change and the partnership gains experience together, the plan should be updated to reflect the results achieved as well as to plan for new objectives, strategies, goals, tactics, investments, and metrics. Recall that Part II discussed the importance of effective communication in the relationship . A good process for achieving a "living plan" is to conduct regular, quarterly management reviews of the partnership's performance regarding plan objectives. Such reviews should include senior executives and program personnel from both partners to discuss and evaluate the performance of the program and to agree on any changes to the business plan.

To help illustrate this point, consider the potential benefits of incorporating a long-range product forecast process as part of the business plan. Generally speaking, when the procuring partner can offer relatively accurate long-range forecasts for needed products, the supplying partner should be able to gain improvements in product cost, production scheduling, and delivery. By passing those benefits on to the procuring partner, both parties win. This would be one of the topics to be considered during the quarterly