How Small Businesses Can Improve Third Party Vendor Management

How Small Businesses Can Improve Third Party Vendor Management

December 11, 2018 Business Insurance and Risk Management, The Beacon Blog 0 Comments

While big businesses generally deal with big vendors, small businesses usually have small vendors. In some ways, this is an advantage for a small business: large vendors may insist on unsuitable terms and small vendors can offer more personal service. The disadvantage is that small vendors may not have the supply chain, inventory management and  compliance management systems of larger companies. Small vendors may also not be able to integrate their systems with their clients’ systems.

According to Robert Berger of 360factors, Inc. (https://www.360factors.com/blog/third-party-vendor-management-for-small-business/) the key to better client-vendor relationships is feedback. Instead of waiting until a problem occurs, give vendors regular performance reports so they can get positive reinforcement instead of just criticism. The best relationships are when vendors are treated as partners. Working in collaboration, both parties contribute to the other’s success.

If your organization has vendor management issues, a third party can set up a management system to improve service.




About the Author

Harry Cylinder

Harry Cylinder, CPCU, ARM has spent nearly fifty years in the insurance industry, the majority of the time as a consultant. He has been employed by The Beacon Group of Companies since 2008, specializing in the review and analysis of property and casualty coverage forms. Mr. Cylinder has been reviewing policy forms as they have evolved over the past decades. In 2008 he published an article in the CPCU Journal which was the first description of cyber insurance coverage for a general insurance audience. Since that time he has regularly written on cyber and other topics for The Beacon Companies’ blog.