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Have you ever found yourself continuously onboarding suppliers simply because operations demand it, or because bid teams have assured a “soft landing”? Do you end up with a multitude of suppliers, without a clear understanding of their roles, only to see them contribute to tail-end spend?
Contract management is the process of creating, implementing, and reviewing contracts. Whether this is between a business and supplier, or partner, contract management is an essential part of your business. As your business grows, contract management can become complex. Therefore, the need for effective strategies and processes is important.
This is crucial for identifying and managing key partnerships. By categorising suppliers based on criteria such as risk, value, and criticality, you can ensure that resources are allocated where they are needed most. This segmentation helps in recognising key partnerships and drives the effectiveness of other contract management processes. For example, a refined segmentation tool can help in identifying strategic partners and managing supply chain risks more effectively1.
Implementing a comprehensive feedback system allows all stakeholders to provide input on the performance of supply partners. This feedback is invaluable as it helps eliminate rumours and provides a clear picture of performance. It also serves as a learning tool for service partners, highlighting areas for improvement and consolidation. Regular feedback from all stakeholders ensures that performance issues are addressed promptly and that the service partner can continuously improve.
Structured and tailored meetings are essential for driving performance, engagement, and motivation. These meetings should be designed to encourage open, honest, and transparent discussions. By having a clear purpose and agenda, these meetings can help ensure that the contract remains high-performing. They also provide a platform for addressing any issues and aligning on goals and expectations.
To effectively capture, monitor, and rate supplier performance, a robust mechanism for scoring or ranking suppliers is necessary. This process should be based on the segmentation of suppliers and should guide the planning of the associated category. A well-designed scorecard can help in tracking performance metrics and making informed decisions about supplier management and category planning.
These points collectively contribute to a comprehensive and effective contract management strategy, ensuring that supplier relationships are managed efficiently and that contracts deliver the expected value.
If you have any specific questions or need further details on any of these points simply fill in the form above to get started with organising your supply chain.
