Vendors are a critical part of construction, but what happens when one fails to deliver on schedule? This can decrease productivity or delay your project timeline, costing your company both time and money. It can also lead to unhappy customers.
In order to minimize your chance of vendor-related setbacks, here are four steps you can take to proactively manage your vendors.
Establish an Onboarding Process for New Vendors
- Designate Contacts – Make sure to establish a primary business contact and an alternative, in case the primary person is on vacation or out sick.
- System Access and Vendor Reports – If you require vendors to submit reports or want them to use your project management platform, be sure to gather any required information to set them up on the platform and train them in the submission process.
- Communication – Provide an overview of your preferred communication methods and time frames (i.e. weekly status calls or email updates).
- Security Access – Ask the vendor to provide a list of individuals that will need access to your construction sites.
Evaluate Vendor Performance
- Customer Service – Ask your staff to provide feedback on vendors’ customer service, including comments and examples.
- Operations – Evaluate your vendors based on their timeliness, quality of materials, flexibility with change orders, and ability to follow any specific requirements you have.
- Safety – Provide details of safety requirements and reporting. If a vendor fails to follow safety protocol, everyone is in danger.
Gather Vendor Data for Financial Planning
- Choose a Significant Item the Vendor Provides – Your vendors probably supply you with multiple items. When doing an annual value and pricing evaluation, focus on one item at a time to determine if the vendor costs are acceptable.
- Collect the Pricing Structure – Ask vendors to provide their pricing structure.
- Discount Opportunities – Ask if a vendor provides a percentage discount for large volume orders. If they do, and the situation applies, take advantage of it.
- Service Standards and Guarantees – While this may not be easy to analyze, it is always good to have note of any guarantees your vendor stands behind.
Create Records for Vendor Failures
- Identify the Vendor – If an problem occurs, clearly identify the vendor associated with it, if applicable.
- Describe the Impact – What was the consequence of the failure (time, money, equipment rental, negative press or reviews, etc.)?
- Vendor’s Explanation – Note the explanation the vendor provided which caused the problem.
- Your Company’s Oversight – Was there something your company was doing or failing to do that contributed to the vendor failure? Did you provide inaccurate direction or information to the vendor?
- Action plan – Is there something you can do to prevent this type of vendor problem from happening again?