5 Tips to Managing Multiple Outsourced Suppliers

Alexander Blitshtein
Alexander Blitshtein
November 26, 2018

While outsourcing has huge benefits, it also carries some drawbacks. It’s sadly easy for projects to get out of control, even when they are carried out entirely in-house. Managing multiple outsourced suppliers requires skill and preparation. Whether you’re juggling suppliers for the same project or managing multiple projects at the same time, we bring you 5 top tips for how to keep on top of multiple outsourced suppliers.

1. Alignment of Responsibilities and Expectations

The first step is to be sure that you and your colleagues know what you want to achieve. If you’re managing a project that cuts across more than one department, gather everyone together to discuss goals, workflows, and timelines. For example, coordinate the completion of backend app development with frontend, graphics design, and marketing needs.

Once you know what you want, you need to share it with your suppliers. Provide detailed project briefs, workflows, and instructions. Make sure that your timeline is clear and that your suppliers know the deadlines for each milestone. If you’re outsourcing to a different country where English is not the native language, you may want to try sharing information in picture form and keeping your wording simple and easy to understand.

It’s very important for everyone to know exactly what their roles and responsibilities are. It’s a good idea to create a Responsibility Assignment Matrix (RAM), which lays out the responsibilities of each person involved – both outsourced suppliers and in-house project managers.

Take the time to make sure that your suppliers’ expectations align with yours. The more you tell outsourced suppliers about your business, the more they will feel connected with your project and the more likely it is for your project to succeed. Share background information about your business vision, company values, and what makes your business special.

2. Centralized Control

Centralized vendor management means keeping some core tasks in-house. Other contributions can be multi-sourced successfully, as long as there is someone who can keep track of the larger picture. Someone has to be in charge of suppliers, to make sure that everyone is fulfilling their requirements on an ongoing basis.

When you’re handling multiple suppliers in one area of work, such as multiple IT vendors, it’s particularly important to have skilled, in-house staff available to oversee the process. The risk is that no one vendor or supplier can see the big picture – each one has just a small piece of the puzzle, making it easy for core capabilities to slip between the cracks.

Centralized management is also important for change management. It’s very common for projects to mutate after the project has already begun. One person needs to take responsibility for responding to changes to the scope, timing, and costs of the project. All changes should be recorded in the contract. Never leave it down to trust.

3. Tracking Deliverables

Keeping deliverables under control is another key aspect to successful multi-supplier project management.

The first step is to agree on a schedule in advance. Your suppliers should send performance reports on a regular basis. If you’re overseeing multiple suppliers for the same project, set fixed intervals for everyone to synchronize their progress. Meetings, whether through video-conferencing or in-person, give everyone a chance to review progress and touch base.

There are many good project management tools today which help you stay on top of deliverables. For example, JIRA is great for IT and web development projects. Asana suits most types of projects. What matters is ensuring that everyone is working from the same, authoritative file. This prevents having people work at cross-purposes, undoing each other’s work or redoing the same task unnecessarily.

4. Risk and Issue Management

Risk and issue management are important for every project, but they are even more important when multiple suppliers are involved. It’s a good idea to set up centralized issue management, where every issue is logged in one location. One person can take responsibility for identifying and responding to issues that arise.

Take time before the project begins to talk through all possible risks, but bear in mind that there’s bound to be stuff that you didn’t foresee. Allow time for things to go wrong – your key liaison could come down with the flu, the CFO goes on maternity leave or your design files get corrupted overnight by a cybervirus. Again, one person should take responsibility for all risk management. Build emergencies into the timeline – and if none come up, you’ll get a pleasant surprise when you finish ahead of schedule.

5. Communication and Relationship

Like every relationship, your success with outsourced suppliers depends on good communication. Your outsourced suppliers should feel like part of your team. Take the time to build a relationship with your remote workers. Ask about their lives, learn a couple of words of their native language, or wish them happy holidays when they have a religious or national celebration. Video chat can also help create a sense of connection.

Good project management tools step in again when it comes to communication. Having a single, dedicated space for project discussions improves communication and increases accountability. Pick a project management platform such as Asana, Slack, or Trello, and keep all communication in one place. Whatever your preferred channel, make sure that it’s easily accessible to all your outsourced suppliers.

Treating outsourced vendors with respect is a key building block in your relationship. One way to show it is to always pay on time and without a fuss. Making workers wait while a bank draft clears makes them feel that you don’t value their input. This is where Payoneer can help. Payoneer enables you to make supplier and freelancer payments to multiple receivers in different countries, on time and without any hassle or delay for one convenient place. Sending secure, fast payments speaks louder than a dozen thank-you emails.

Manage Multiple Suppliers Successfully

Outsourcing is the way to go for project management, but it needs care and attention. With Payoneer, at least you won’t need to worry about making your supplier and freelancer payments. Along with good communication, centralized management, and clear tracking for deliverables, you can handle multiple outsourced suppliers with success.