The age of the small medical practice may be ending. Today, roughly 17% of physicians practice alone compared to 41% in the 1980s.
With how lucrative it can be to join another, larger healthcare organization, is it worth running a private clinic?
If you value autonomy and have the will to exercise as strong of a business acumen as you do medical professionalism, the answer is yes! On the business acumen front, if profit margins matter to you (and they’d better), one of the top questions that you should be asking yourself is, “What is vendor management?”
Vendors can consume large portions of a medical practice’s bottom line. If these expenses and relationships are not adequately managed, you’re going to have a hard time keeping your operation in the black.
In this write-up, we briefly explore what vendor management entails and why it’s vital.
Exactly What Is Vendor Management?
Vendor management means taking an active approach when it comes to the relationship that you have with your external partners. This proactive approach is intended to ensure that vendors are always serving your goals at the rate in which they’re expected to.
Vendor management, of course, isn’t solely beneficial to your company. By keeping up with your vendors, you’ll also be giving them a chance to communicate their needs to you so that both parties can maintain a mutually beneficial partnership.
What Does Vendor Management Embody and Why Is It Important?
Now you can answer the question, “what is vendor management?”. The next thing that we want to do is explore what specifically vendor management touches on and why those touchpoints are vital. Here are six facets of managing vendors that are worth noting:
1. Finding Quality Partners
Vendor management starts before you even find a vendor to manage. The very first step to taking a hands-on approach with your vendor relationships is carefully weighing all of the options that you have when it comes to fulfilling whatever your needs are.
If you’re looking for a paper supplier, for example, quality vendor management would dictate researching multiple partners and requesting several quotes.
Some medical practices find it challenging to weigh more qualitative vendors like temp agencies. In these cases, working with a locums VMS or another vendor management service that specializes in whatever niche you’re struggling with can be helpful.
2. Negotiating Pricing
A few rounds of negotiating with a prospective vendor could save your medical practice thousands of dollars over a year. As a practice owner, you need to be open to arming yourself with research on competitive pricing and requesting that vendors meet your standards on that front.
If pricing is non-negotiable, other concessions might be worth exploring, including faster shipping of services, priority customer service, or a higher product tier.
3. Creating Beneficial Contracts
Nothing that you say during the courting or negotiation phase of bringing on a vendor matters unless you have it in writing. Therein lies one of the most integral parts of a solid vendor management strategy – Contract drafting.
All of your contracts with vendors should be drafted by legal professionals that are vested in your interests. If your vendor uses a boilerplate contract, you should have a licensed professional look over it to ensure that key provisions that were discussed are protected in writing.
4. Providing Quality Control
As you and your vendor’s relationship pushes on, you may find that you start to be taken for granted. Perhaps shipping dates start pushing, customer service takes a turn, or the quality of the products that you receive dips.
A medical practice that’s not vested in vendor management might be inclined to ignore these lapses or might not notice them at all. Vested medical practitioners, though, would keep a close eye on their services. That way, they could request that problems be resolved before they spin out of control.
5. Staying on the Same Page Over a Long Period
Vendor management’s foundation lies in communication. As time goes on, communicating becomes increasingly important because both you and your vendor’s goals will change.
Making the time to schedule a quarterly touch-base or similar meeting will ensure that you and your vendor continue to support one another’s evolving businesses.
6. Dispute Resolution
Even outstanding partners will have disagreements from time to time. How you resolve those disagreements will determine the frequency in which you’re turning over vendors.
In case you hadn’t guessed, it’s never a good idea to resign yourself to high turnover rates when it comes to your business partners.
You’ll want to know the point person that you can speak to at each of your vendor’s companies, and you’ll want to have a great relationship with them. That way, you can be sure that no matter what happens, you’ll be able to work through snags.
Keeping Up With Your Vendors Is Always a Good Idea
Absenteeism, when it comes to vendors, can wreak havoc on your practice’s quality of services and bottom line. You’ve taken the first step in maintaining better vendor relationships by asking what is vendor management.
Now that you know the answer and what management entails, your next step is to start getting involved.
Do time constraints make vendor management impossible for your practice? If they do, know that there are external agencies that can manage vendors on your behalf. That way, you only have one external party to communicate with as opposed to having to deal with each of your vendors individually.
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