An Approved Vendor List (AVL) is a curated directory of suppliers that a company has evaluated and pre-approved to provide specific goods or services. Procurement teams are typically required to source from suppliers on the AVL, ensuring that purchasing decisions meet established quality, compliance, and commercial standards.
Understanding the Approved Vendor List (AVL)
An Approved Vendor List formalizes supplier qualification. Rather than evaluating vendors from scratch for every purchase, the procurement team maintains a list of pre-vetted suppliers that meet the company's standards. Any time a new purchase is needed, procurement draws from the AVL.
For CPG brands, the AVL typically covers raw material suppliers, packaging vendors, co-manufacturers, 3PLs , and service providers. Qualifying a supplier for the AVL involves evaluating their quality certifications, financial stability, capacity, pricing competitiveness, and compliance with regulatory requirements.
The AVL reduces procurement risk by ensuring that only reliable, vetted suppliers are used. It also speeds up purchasing by removing the need to re-evaluate suppliers on each transaction.
Core Components of an Approved Vendor List
An AVL entry typically includes supplier name and contact information (legal name, address, key contacts), product or service category (the specific items or services the supplier is approved to provide), qualification status (fully approved, conditionally approved, or under review), quality certifications (such as SQF, BRC, ISO 9001, or FDA registration depending on the category), performance data (historical on-time delivery rates, quality scores, issue history), contract status (whether an active pricing agreement or master supply agreement is in place), and review date (when the qualification was last reviewed and when the next review is due).
Managing an AVL in Practice
Building an AVL starts with identifying the categories of goods and services a company sources regularly. For each category, the procurement team defines qualification criteria, which may include certifications, minimum capacity, financial health checks, and reference checks.
Potential suppliers complete a qualification process, which may involve submitting documentation, completing a supplier questionnaire, and passing an audit. Approved suppliers are added to the AVL with relevant details and review dates.
Existing suppliers on the AVL are monitored through vendor scorecards and periodic reviews. Suppliers that fall below performance thresholds or fail re-qualification are placed on probation or removed from the list.
Related Concepts
- Vendor Scorecard is the tool used to evaluate and monitor the ongoing performance of AVL suppliers.
- Request for Quotation (RFQ) : RFQs are typically sent only to suppliers on the AVL.
- Procurement is the function responsible for maintaining the AVL.
- Supplier Lead Time is a key data point captured in the AVL for planning purposes.
- Three-Way Match applies when purchasing from AVL suppliers.
