Abstract

Vendor Relationship Management (VRM) has evolved into a critical strategic function, especially within the context of complex and multi-stakeholder projects. Traditional procurement and contract management approaches are often inadequate for managing the dynamic, interdependent, and high-risk relationships involved in such environments. This paper proposes a conceptual model for Vendor Relationship Management (VRM) designed to enhance strategic value creation and ensure project success in complex project ecosystems. The model integrates key components such as trust-based collaboration, performance-based governance, digital integration, risk-sharing mechanisms, and long-term value alignment. Drawing from stakeholder theory, resource-based views, and relationship marketing principles, the model underscores the necessity of transitioning from transactional vendor management to a more strategic, value-driven partnership approach. The conceptual model emphasizes proactive engagement through structured vendor segmentation, performance scorecards, communication frameworks, joint value planning, and capability assessments. It also incorporates digital tools for real-time monitoring, data transparency, and performance analytics, enabling project managers and procurement leaders to make informed, adaptive decisions. By aligning vendor goals with project objectives and broader organizational strategy, the model supports innovation, resilience, and efficiency across the project lifecycle. Furthermore, the model accounts for the complexities inherent in large-scale projects such as multiple dependencies, regulatory oversight, cross-functional coordination, and evolving stakeholder expectations by providing mechanisms for continuous relationship evaluation, contract flexibility, and conflict resolution. This framework is especially relevant for industries such as construction, aerospace, oil and gas, and IT infrastructure, where vendor contributions are mission-critical. The proposed VRM model offers a strategic lens for optimizing vendor engagement beyond cost minimization, driving co-creation of value and sustained competitive advantage. Future empirical studies may validate the model’s effectiveness across different project types and geographies, providing pathways for refinement and contextual adaptation.