Your Prime Vendor Program

All suppliers want to be the primary vendor to your operation given that you of course meet minimum orders and pay your bills timely.

The two key reasons for utilizing a primary vendor are better overall pricing, as well as better service.  Of course a prime vendor program should provide additional benefits such as fewer deliveries, fewer invoices, fewer items backordered and much faster response time to any problems.

When evaluating a prime vendor program as opposed to splitting your orders between two or three suppliers, you of course need to take into consideration the above points.  These points need to be weighed between the use of a prime vendor program and multi-vendor approach.

A prime vendor relationship must be established for a definite length of time.  The suppliers that were not successful in becoming your primary vendor should be given the reason and when they will have another opportunity.  It is important to maintain a good relationship with suppliers that were not awarded your business as things change and you may need to call on them during the course of your agreement.  You want these suppliers to be responsive to you and this will only happen if they feel they have a fair opportunity to gain your business at the conclusion of the current agreement.

Too often a prime vendor relationship becomes an on-going relationship with no definite length of time agreement.  In almost all of these cases, the prime vendor loses sight of the value and importance of your relationship and starts to take it for granted.  Ultimately you may be treated as just a me-too customer and all the initial benefits are gone.  Yet many operations stay in this primary vendor relationship because they are afraid of change and know that even if the service and pricing is not as good as it used to be, it is still a known entity versus exploring other options.

In any relationship with suppliers, we must remember that there will be a time when changes will have to be made.  Allowing any supplier to become securely entrenched in your operation will increase costs and decrease service levels as they start to take your account for granted.

  • Prime vendor programs work when definite time frames are established.
  • Prime vendors should provide better costs and service.  This must be monitored.
  • Work with other facilities or your Group Purchasing Program to organize a prime vendor program that will provide more purchasing power.
  • Maintain a good relationship with the suppliers not awarded the prime vendor agreement.
  • Don’t become overly comfortable with just one supplier.

PRIME Services

PRIME Services, from its original roots as a purchasing and consulting company in 1983, has grown into one of the largest group purchasing organizations for nursing homes and assisted living communities across the United States.

Today, PRIME Services has three divisions, all focused on removing costs from the supply chain while increasing operational efficiency. The three divisions are; Group Purchasing and Custom Contracting, Consulting and Purchasing Services (CAPS), and a Technology Division

Be sure to mention you're a PRIME Services member when calling in to ensure you receive additional discounts that are available exclusively to PRIME Services members.

 

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