An Approved Vendor List is an essential tool for procurement departments as it helps them manage their suppliers and maintain a consistent level of quality. Creating an AVL requires careful consideration of the vendor selection criteria. In this article, Viindoo Enterprise Management Software will highlight the best practices with AVL for manufacturing businesses to follow.
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What is Approved Vendor List?
An Approved Vendor List (AVL) is a document that contains the names and information of suppliers, vendors, or contractors who have been authorized by a company or organization to provide goods or services. An AVL is an essential tool for procurement departments as it helps them manage their suppliers and maintain a consistent level of quality.
What is Approved Vendor List?
An AVL is typically created by the procurement team of an organization, and it is based on several criteria. These criteria can include a supplier's track record, financial stability, compliance with industry regulations, reputation, and the quality of their products or services. Once a vendor has met the criteria, they are added to the AVL and are allowed to provide goods or services to the organization.
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Purpose and Benefits of Approved Vendor List
The purpose of an AVL is to ensure that the procurement process is consistent and that the organization is working with trusted and reliable vendors. The AVL helps to eliminate the need to go through the entire vendor selection process every time the organization needs to purchase goods or services. This saves time, reduces costs, and ensures that the procurement process is more efficient.
Purpose and Benefits of Approved Vendor List
There are several benefits to using an AVL, including:
- Risk reduction: By working with pre-approved vendors, organizations can avoid working with vendors that have a poor track record, financial instability, or that do not comply with industry regulations. This reduces the risk of fraud, poor quality, and other issues that can arise when working with unreliable vendors.
- Better supplier relationships: When an organization works with a vendor on a regular basis, it can lead to a closer relationship. This can result in better communication, better pricing, and more efficient procurement processes. By maintaining an AVL, the organization can ensure that it is working with vendors that it trusts and that it can build strong relationships with.
- Improved quality of goods and services: By pre-approving vendors based on their quality standards, the organization can be sure that the goods and services they receive meet their requirements. This can lead to better products, better customer satisfaction, and fewer issues with defective goods or services.
- Streamlined procurement process: By having a list of pre-approved vendors, the procurement team can quickly identify vendors that are qualified to provide the goods or services that they need. This can save time and reduce costs associated with the procurement process.
Approved Vendor List Best Practices
Creating an Approved Vendor List requires careful consideration of the vendor selection criteria. The criteria should be based on the organization's needs and should reflect the industry standards for:
- Quality
- Reliability
- Compliance
The procurement team should also consider the vendor's financial stability, reputation, and past performance when making their selection.
The AVL should be regularly reviewed and updated to ensure that it remains current and reflects the organization's changing needs. Vendors that no longer meet the selection criteria should be removed from the list, and new vendors that meet the criteria should be added.
Approved Vendor List Best Practices
It is also essential to ensure that the AVL is accessible to all relevant personnel within the organization. This includes:
- Procurement team
- Department heads
- Other key stakeholders who may need to access the AVL to identify vendors for specific projects or purchases.
It is also important for businesses yo establish a clear process for adding or removing vendors from the Approved Vendor List. This can include an initial evaluation, ongoing assessments, and a review process for removing vendors who no longer meet your company's standards.
Plus, procurement team also needs to keep accurate and up-to-date records of vendor information, assessments, and any communication. This can help with future vendor selection and ensure that your AVL is current.
Manage your Approved Vendor List with Viindoo Manufacturing
Viindoo Manufacturing software is a multi-purpose production management system which allows businesses to keep track of which suppliers and vendors deemed acceptable to conduct business with.
By following the best practices as noted above and applying it in Viindoo Manufacturing Software, businesses can create and maintain a robust AVL that supports their business goals and objectives.
Viindoo Manufacturing
Viindoo Manufacturing offers the following features:
- Integration with Viindoo Purchase Management Software, Viindoo Inventory and
- Active control of the amount of stock and order the right amount of products at the right time
No supply chain disruption with reordering rules - Product setup with different purchase prices for different vendors
- Procurement approval management with purchase orders, inventory transfers, invoices and payments
- Vendor Bills Control
- Bulk Vendor bills creation
In conclusion, an Approved Vendor List is an essential tool for procurement departments. It helps to reduce risk, improve supplier relationships, improve quality, streamline the procurement process, and ensure that the organization is working with trusted and reliable vendors. Try Viindoo Software System to implementing AVL in the best manner.
