Supply chain management has gaining its importance in serving business operations and being part of strategic management of the business. Its role has been shifted from being a support department to being the core department of business with strategic importance and role to play in overall operations of the business. In modern business world no organization can sustain without having a well established, effective and efficient supply chain management. The role of vendors along with vendor management with the introduction of information technology is important consideration for organizations.

Now with increase of strategic importance of supply chain management the service provider is now becoming a partner to the organization, rather being just the vendor. The factor influencing competitive advantage of the organization is now having the better vendor management and vendor relations in the list. Therefore in coming years the importance of supply chain management is expected to increase with the increase in competition and globalization.

To understand the strategic supply chain management, key concepts and use of information technology to maintain the vendor relationships, this report in presented on one of the leading FMCG company Nestle. Their products range is wide and the concentration of this report is on organization’s Pakistan operations. Since Pakistan is the part of their global supply chain operations but for their milk products they have to rely on the local milk suppliers who are not very much educated and well equipped. Therefore managing them is a challenge for the organization and same challenge and its handling is under study in this report. There are some recommendations also given at the end so that improvements can be made in local supply