Virtually all organizations must rely on outside sources for products, supplies, equipment, and other essentials. The ability of the procurement function to optimize the relationships with these third-party vendors is crucial for ensuring operational success and keeping costs under control. This requires the development and implementation of carefully crafted and well-executed supplier relationship management strategies.

However, the vendor relationship management process offers numerous challenges. Obstacles that can impede the relationship include a lack of communication, changes in the regulatory landscape that impact the supply chain, and insufficient oversight of vendor activities. Unless your organization has a sound supplier relationship strategy in place, your procurement function is likely having a negative impact on your bottom line.