How a Vendor Rating, Tagging System Improves Transparency and Helps Businesses Grow
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“We started validating [our] tool with CEOs, CFOs, heads of product, and they all said, ‘This is something we can use, and we need it sooner rather than later,’” said Tasneem Manjra, CEO and co-founder of Caravan, a vendor relationship management platform.
Vendors are the heart of a company’s activities and processes, as they can drive new growth within an industry, ensure revenue goals are reached, and mitigate supply chain risks. That’s why it’s so important to effectively manage vendor relationships.
Vendor transparency is key. Manjra explained that Caravan not only provides clarity on a vendor’s history and reliability, but also creates an opportunity for buyers to cut costs without sacrificing quality through vendor analysis tools and customer “report cards” that help fix any key vendor issues immediately.
In the latest episode of the Thomas Industry Podcast, Thomas’ Vice President of Platform Growth and Engagement Cathy Ma spoke with Manjra about how vendor relationship management benefits business growth and how Caravan is filling a transparency gap between buyers and their vendors.
How Caravan Fills a Gap in Transparency for Buyers
The path to Caravan began 15-20 years ago when Manjra’s co-founder noticed a pain point for sourcing procurement groups at a large Fortune 500 retailer.
“He noticed a lack of transparency in terms of what each procurement officer knew about the other’s dealings,” she said. “They were unaware of which person a vendor or buyer was working with on the vendor side [and] unaware of the quality of the given vendor across the board.”
With that obstacle continually resurfacing, Manjra and her co-founder kept thinking, “there’s something here that companies need.” This led to the launch of Caravan in 2020.
“Fast forward now to 2022: we have a complete enterprise-ready product,” Manjra said.
She explained that Caravan answers the questions buyers often have but don’t know where to find.
“What's the quality of a particular vendor? Why are we paying a particular price? Have we been able to negotiate against other vendors? And is that visible throughout the organization?
“A lot of it is really driven by visibility and then finally cost cutting,” Manjra said. “[We’re] in an inflammatory situation right now. Everyone from retailers to service providers to manufacturers are looking to cut costs. Caravan provides an excellent opportunity to do so while not sacrificing quality.”
The Key to Vendor Relationship Management
Procurement is a key aspect of many companies’ overall business strategy, but a strategic approach to managing suppliers is necessary to get all of the benefits of procurement.
A company may work with a hundred different vendors at a given time to fulfill needs. These vendors likely have different pay rates, points of contact, and contract terms. Without properly managing this, it’s easy to overpay or overlook a discrepancy. This may happen because companies are using outdated systems or systems that aren’t compatible with the functions they need.
“[Imagine] a $50 million company,” she said. “Let’s say it’s a manufacturing company, and they're buying all sorts of goods and services. They've got consultants, they've got marketing folks, they've got actual, tangible goods that are coming in. They've got hundreds, if not thousands, of different vendors.”
Manjra continued, “In the current state, most of these individuals are managing maybe a tool like Salesforce, which is not really designed for this type of use case. Or [they are] potentially using an enterprise relationship platform (ERP). So, they're trying to figure out, ‘How do I track all my vendors?’ It's a little bit clunky and a little bit difficult.”
Conversely, Caravan lays out all of the information buyers need to make strategic business decisions. Manjra explained that it helps procurement employees think harder about how they do their job and continually consider how to optimize processes.
“[On Caravan] you have a rating for each vendor that you've used. You can see previous negotiations for that particular vendor in one place. You can see who else participated in that negotiation. You can see how much was saved and how much was initially bid,” she said.
“Conversely, you also have folks on the outside of a particular department, [like] CFOs and CEOs, and they no longer have to call an accountant, dig around, or take days to pull these types of reports. There is 100% transparency, and they're off to the races in terms of thinking about their supply chains, thinking about their vendors, and thinking about the cost of goods,” Manjra explained.
A Greater Focus on Sustainability and Diverse Suppliers
A greater company focus on sustainability has become more commonplace over the last few years, and according to Harvard Business Review, a majority of the world’s largest companies now issue a sustainability report, with over 4,000 companies setting a science-based carbon target since 2015.
When Manjra created Caravan, she knew the platform needed tools to represent its commitment to sustainability and diversity that made a real impact while also improving search range and accuracy.
“One of these features is a tagging tool,” Manjra said. “You can tag any one of your vendors with whatever you like. For example, you could tag a vendor as being environmentally friendly. Maybe they have a self-powered factory [or] they are committed to hiring from low-income communities.
“As your colleagues are searching for vendors, [and] if sustainability, for example, becomes an objective of the company, then you can start searching for ‘environmentally friendly’ [vendors]. Out of the thousands of vendors, the ones that have committed to these particular issues come up at the top of your list.”
Caravan also has a rating system, which allows users to rate their vendors based on the source of labor or goods and environmental impact. This is another way the platform improves transparency for the buyer, Manjra explained.
Listen to the Full Episode
“A lot of my career has been around listening; listening to folks who are in the field who are hopefully going to digest your product or service and then figuring out how to then build that. I think a lot of that is translated at Caravan,” Manjra said.
You can listen to the full Thomas Industry Podcast episode with Tasneem Manjra on the streaming platforms below.
For more episodes of the Thomas Industry Podcast, visit Thomas Insights.
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