One of the most addressed domains in Master Data Management (MDM) is the vendor domain – or is it called the supplier domain?
I have seen the terms vendor and supplier used synonymously many times at different MDM end user organizations, by MDM system integrators and by MDM platform vendors where I have been engaged. This ambiguity exists in English, the most used corporate language, whereas in other languages the distinction seems to be much clearer.
In a recent post by Jignesh Patel of Stibo Systems it is suggested that supplier and vendor are two opposite terms. The post is called What Vendor Data Is and Why It Matters to Manufacturers. I remember to have read the similar post before, probably in a previous version, and commented that this interpretation, in an MDM context, confuses me.
The linguistic issue is to me that a supplier is someone you buy from, and a vendor is someone who sells to you. But as interpreted in the above post, a vendor could also be someone who sells for you. In the latter case I however have mostly seen terms as dealer and reseller used.
Another possible distinction will be that a supplier is someone who deliver goods and services. A vendor will be someone who deliver the bill. So, in an MDM implementation supplier will be used if the MDM implementation is product oriented and vendor will be used if the MDM implementation is procurement and/or financial oriented or dominated.
This distinction reveals an interesting MDMish observation which is that usually the one who deliver the goods and services and the one who deliver the bill is the same entity – but not always.
What is your stance? Is vendor and supplier the same, a bit different or opposite?
I’ve never before seen anyone use the term “vendor” to represent an entity on the demand-side of a business – only on the supply side. Demand-side parties are called dealer/distributor/reseller/retailer etc. depending on the industry. As for supplier/vendor I’ve seen some companies follow the goods vs. invoices convention or they use one term in general as a company/industry practice.
In theory I guess the demand-side use of vendor is correct, but why the h*** anyone would invent more problems in this space than we already have completely beyond me 😀
Thanks for commenting and we are on the same page and I think we agree that demand-side and sell-side is the same and supply-side and buy-side is the same.
Yes, we do agree on that 🙂
I have to agree with THESLOWDYIER on both counts: I have never seen the term used on the demand side and why would anyone try to make this more complicated!? For practical purposes I find most of the distinctions that might exist relevant for ERP applications and not Master Data Management. For example, a distinction between a bill-to and a ship-to is (in my mind) transactional, not master data. One can see this by thinking about a different transaction where the ship-to and bill-to the same entities but are the reverse of the first transaction. Even if it does not happen for a particular entity today, you are just one reorganization away from it being so.
Thanks for adding in Gino. I have also noticed that ERP solutions – as for example SAP S/4 HANA – have adopted the business partner view which means that you have the same repository for any entity despite being on the supply/buy-side or the demand/sell-side. MDM implementations will have to follow that path too – and should in my view have done that long ago.
In the organizations I have worked with, “Vendor” tends to be used when referring to the abstracted entity, where it becomes “Supplier” in the context of ship from-ship to locations and things like that. Even that has been very inconsistent and often confusing to people. We have adopted the term “Business Partner” to be able to talk about any entity that we are paying or being paid by for any goods or services.
Thanks for commenting, Ron. I think it will become best practice to do so.