In a supply chain, usually a manufacturer, a retailer or a distributor is a business that brings raw materials or merchandise to end users. In general, a supply chain supplier produces inventory/stock items directly and sells them into the next phase in the supply chain. These days, these terms now refer to a provider of any good or service. This means that the business is defined by its relationship with other entities.
In a simple supply chain, manufacturers produce the goods and pass them through a series of distributors until they reach end users. At the end of this journey, the goods are stored and ready to be sold. In the case of electronic goods, the vendor stores the electronic components such as chips, circuits and microprocessors until it reaches the end user. When a good or service is purchased from a vendor, the relationship between the vendor and the supplier is defined by a contract. These contracts specify the rate, price and terms and conditions of sales between the two parties.
Each and every contract between the two parties (manufacturer and supplier) establish an economic relationship between them and form a contract for services between the two entities. The terms and conditions of a contract between a vendor and a supplier specify or guarantee the quality, technical efficiency, prompt delivery and installation of goods. In business terms, it also describes the relationship between the two parties as set out in legal terms. For example, if the customer purchase goods from the supplier and later have problems with the goods supplied by the supplier, the vendor can sue the supplier for breach of contract.
The role of a good or service provider is defined in contracts between two parties. It is a service seller who sells good or performs services that can be done by another firm or entity. More commonly, vendors are in the business of selling goods, equipment or supplies to others. However, there are other vendors who sell only marketing solutions or promotional products to end-users. They are not part of an organization and does not deal with goods.
If you want to engage into this kind of business, you need to find a qualified vendor. It is not easy to find a skilled and professional vendor because it is not like any other job where you can just pick the candidate right away. Vendors are always on the look out for suppliers who can supply them raw materials, components and parts in large quantities. It is the vendor’s responsibility to track down the best supplier at the earliest to avoid oversupply. If a vendor is unable to source out raw materials at the earliest, it may lead to a possible problem in sourcing out raw materials at an advanced time. Other than this problem, vendors will also be able to identify the best supplier according to his individual requirements.
To ensure a smooth vendor management and procurement process, vendors should be chosen according to their procurement strategies. A vendor needs to have a clear vision of his requirements before choosing a vendor management company. A vendor management company helps vendors to identify the most suitable vendors for their products or services based on the vendors’ procurement policies. These companies also help vendors determine vendors who can meet their business objectives, deliverables and goals in the fastest manner. Thus, by using effective vendor management solutions a business can increase its productivity and at the same time reduce cost while acquiring the goods and supplies that it requires from the market.