--- layout: default_v3 language: default permalink: supply-chain-risk-management/vendor-vetting.html i18n_link: 1659 updated: 2020-08-28 #--- article key-values ---# collection: default_topiccluster t_keyword: Vendor Vetting tags: Vendor Vetting, Supply Chain, Inventory Ordering Software type: supporting page_id: 1659 hreflang_id: 1659 parent_id: 1627 date_published: 2020-08-28 date_modified: 2020-08-28 #--- javascript schema ---# javascript_schema: - script: jquery_3_2_0_min - script: bootstrap_min - script: article_infinite_scroll - script: article_mix_infinitescroll - script: article_mix - script: article_mix_faq - script: article_mix_toc #--- section schema ---# section_schema: - section: nav-main_menu - section: article_body_v2 - section: footer - section: schedule_demo_cta #--- page key-values ---# meta_tags: t_meta_title: The 4 Steps of Vendor Vetting & Why They Matter t_meta_description: Vendor vetting enables businesses to find suppliers that meet their order needs based on ideal characteristics, such as reputation, quality, and value. t_meta_abstract: Vendor vetting enables businesses to find suppliers that meet their order needs based on ideal characteristics, such as reputation, quality, and value. i_meta_image: article_body: json-ld_article: v_date_published: 2020-08-28 v_date_modified: 2020-08-28 author: p_author_id: 113 t_author: Chloe Henderson p_author_url: chloe-henderson.html i_author: 113.jpg t_author_description: Chloe received a bachelor's degree in journalism and mass communication from Ashford University and is currently a digital content creator for Hubworks. In her free time, she enjoys acting, writing, and spending time with family. p_author_facebook: //www.facebook.com/HubWorksApp p_author_twitter: https://twitter.com/HubworksApp p_author_linkedin: p_author_instagram: feature_snippet: p_type: text t_title: t_description: content: heading: t_title: The 4 Steps of Vendor Vetting & Why They Matter t_description: Vendor vetting enables businesses to find suppliers that meet their order needs based on ideal characteristics, such as reputation, quality, and value. image: i_image: the-4-steps-of-vendor-vetting-why-they-matters-1598579187-3600.png t_image_description: risk assessment v_image_attribution: //pixabay.com/photos/holland-flowers-business-warehouse-89589/ v_image_license: Creative Commons Zero v_video: paragraphs: - t_headline: t_text: As a type of risk management, vendor vetting allows businesses to avoid external supply chain threats. By selecting suppliers that are compliant with standards and regulations, companies can establish partnerships that promote operational efficiency. Finding ideal vendors depends on a company's individual values and requirements. p_headline_type: h2 image: i_image: t_description: v_attribution: v_license: callout_text: - t_headline: What is Vendor Risk Management? t_text: Vendor risk management (VRM) is the practice of assessing potential vendors before and during a partnership. VRM investigates suppliers to determine the risks they possess and their qualifications to handle the company's assets. This evaluation assures companies that they can share sensitive information and entrust the supply chain processes to secure third parties.

Organizations are directly affected by the disruptions their suppliers experience, such as data breaches and operation setbacks. This leaves both companies to bear the financial consequences. Therefore, businesses should invest time in developing thorough VRM to prevent exposure to external threats.

Successful VRM can help companies-

VRM also creates a standardized process that allows management to efficiently sift through vendors to find the best fit. p_headline_type: h2 image: i_image: what-is-vendor-risk-management-1598550536-7394.png t_description: Vendor Vetting v_attribution: Vendor Vetting v_license: pexels.com callout_text: - t_headline: 4 Steps to Successful Vendor Vetting t_text: Companies should perform vendor vetting to ensure that potential suppliers can provide high-quality services and products with low risk. Without proper vetting, businesses can experience sub-standard production, leading to unsatisfied customers, decreased retention, and negative reviews.

Organizations can follow 4 simple steps to successfully vet suppliers-

1. Create a Vendor Selection Criteria

First, companies must outline their goals and ideal characteristics. Management should keep in mind that suppliers have their own strengths and weaknesses, so criteria should focus on essential categories. For example, if a business is looking to expedite production time, they might consider a supplier with limited communication but fast operations. Likewise, companies should note any deal-breakers, such as a history of late shipments or bad reviews.

Establishing a criterion to judge suppliers is a form of risk management that reduces the company's exposure to threats. Once vendors have been chosen, management should group them for comparison. However, suppliers should be categorized with similar vendors. For example, suppliers that offer raw materials should be kept separate from those that provide assembled components.

2. Search Sources for Suppliers

Once the vendor shortlist is formed, management should search for reliable sources for additional candidates. Vendors found in publications are already slightly vetted, streamlining the selection process. Companies can find suppliers in several sources, including-

While the above sources are great places to find suppliers, companies should conduct further vetting on selected vendors. p_headline_type: h2 image: i_image: 4-steps-to-successful-vendor-vetting-1598550536-3148.png t_description: Vendor Vetting v_attribution: Vendor Vetting v_license: unsplash.com callout_text: - t_headline: t_text: 3. Establish the 10 Cs

Many organizations use Carter's 10 C's of supplier evaluation for the final vetting phase. This system requires interviews from each vendor so companies can rank them on a 1-5 scale. Suppliers will be judged on 10 categories-


4. Get Quotes from the Final List

Once management has sorted through all potential suppliers and narrowed down the final list, it is time to gather quotes. Companies should first send over a list of requirements, such as order quantities, time frames, and quality. The returned quotes should be concrete prices, not estimates, and span longer than a month. Management should inquire about discounts and other incentives for extended contracts and larger order sizes.

Quotes are then compared based on price, quality, and order specifications. Companies should aim to find a quote with the best value, not the lowest price.


Vetting vendors is crucial to finding suppliers that offer the best services, products, and value for a business. With proper VRM, companies can minimize third-party risks and build a partnership with reliable vendors. p_headline_type: h2 image: i_image: 4-steps-to-successful-vendor-vetting-1598550536-2796.png t_description: Vendor Vetting v_attribution: Vendor Vetting v_license: pexels.com callout_text: event_body: json-ld_event: t_name: Employee Scheduling for Restaurant Managers t_description: Attendees will learn how create excellent schedules. The class teaches managers how to estimate the number of employees they need to staff their locations; how to accurately forecast their customer demand; how to quickly and accuaratly write and communicate schedules to employees; and how to evaluate the accuracy and optimization of their schedules to make adjustments. v_start_date: 2022-08-08 i_image: p_location_name: Altametrics Online Webinar Course p_address: webinar.altametrics.com?site=altametrics v_price: 10.00 t_offer_description: Priority Registration v_registration_url: webinar.altametrics.com?site=altametrics ---