In a highly competitive market, one way to reduce costs is through better contract management of supply. With good contract management, it is possible to find ways to reduce costs, shorten deadlines and renegotiate before deadlines are missed, thus avoiding unnecessary fines and liabilities. On the other hand, poor management makes suppliers think they can relax in fulfilling their contractual obligations.
One of the biggest opportunities for profit improvement for most retailers today lies in optimizing negotiations with their supply chain. Better purchasing requires optimizing negotiations and having accurate information about supplier performance to ensure adequate sales and margins. As purchasing and negotiation with associated suppliers becomes more complex, it becomes difficult to identify the best suppliers and execute appropriate strategies that maximize financial returns.
To overcome these difficulties, we have highlighted a list of best practices that help to minimize problems in the relationship with your partner:
- Insist on formalizing hiring;
- Use of automation tools in formalization (Purchasing Portal, Minutes, Contract Approval, Digital Signature);
- Service Contracting: improve Service scope to improve management;
- Contract review: negotiation to rebalance the economic and financial aspects of contracts;
- Managing relationships with suppliers (in addition to purchases in line “A”) as a tool to reduce costs.
Source: Profimetrics
