Vendor contract amendments can look simple and harmless – a brief paragraph, perhaps up to two pages, addressing some routine items. They often even include an upfront payment to recompense for your troubles, an unexpected “bluebird” that might help offset the inevitable budget worries. Don’t be lulled into complacency. These few sentences can carry significant implications and should be inspected just as closely as your original vendor contract.
Never Sign a Vendor Contract Amendment Without Vetting It
Topics: Vendors & Contracts
Why You Should Manage Your Vendor Contracts During Budget Season
For anyone working at a company with a calendar-based fiscal year, chances are that department heads are being asked to “do more with less,” or at least to increase output at a faster rate than costs. As anyone with budget responsibility knows, it’s no easy task to fund realistic pay increases for appreciated employees let alone accommodate growth in other expense areas.
Topics: Vendors & Contracts
Less is More: A Case Study in Manufacturing Vendor Contract Management
If your organization utilizes a strategic sourcing partner, that relationship should extend beyond ensuring the prices you pay vendors are consistent with what is being charged across the industry. A skilled sourcing expert can identify opportunities for process improvements that may have no influence on the invoice but will have a material impact on your bottom line.
Topics: Manufacturing, Strategic Sourcing, Vendors & Contracts
Proceed with Caution on Vendor Contract Changes – A Real World Example
In recent posts, we have offered words of caution concerning the perils of free money when considering a proposal, contract or addendum from a vendor. As part of our work, we are continuously monitoring the market to remain current on the trends that impact our clients. Lately, we have seen a real-time case study playing out in the market that reinforces why every proposed vendor contract amendment should be reviewed carefully.
Topics: Strategic Sourcing, Vendors & Contracts
Vendor Contracts: Identify Cost Savings Initiatives in Procurement
A study conducted by the International Association of Contract and Commercial Management (IACCM) found that poor vendor contract management processes cost companies as much as nine percent of their total revenues. Although this was a cross-industry study, there is little reason to believe manufacturers, distributors, or retailers fare any better or that the picture has improved since 2015. With so much money being left on the table and the drumbeat for cost efficiencies sounding as loudly as ever, manufacturers are seeking new ways to make this area easier to manage more effectively.
Topics: Manufacturing, Vendors & Contracts
When to Use Corrugated Packaging Box Manufacturers vs. Distributors
It’s a business concept engrained into the American psyche to the point of cliché – cut out the middleman, and save money. Heck, “I Can Get It for You Wholesale” was a hit Broadway musical starring Barbra Streisand way back in 1962. And the premise makes sense on the surface – with one less mouth to feed in the food chain, there’s more profit left for those still in the mix, right?
Topics: Vendors & Contracts
A Case Study in Manufacturing Vendor Contract Management
If your organization utilizes a strategic sourcing partner, than that relationship should extend beyond insuring the prices you pay vendors are consistent with what is being charged across the industry. A skilled sourcing expert can identify opportunities for process improvements that may have no influence on the invoice but will have a material impact on your bottom line.
Topics: Strategic Sourcing, Vendors & Contracts
Considering an Acquisition? Don’t Overlook Your Vendor Contracts
Acquisition continues to be a preferred strategy for manufacturers seeking to increase revenue and create long term growth. Early stages of a merger usually center on factors like strategic fit, market footprint and business integration. There is another less exciting but important factor to consider during these talks: vendor contracts which can cause costly, tactical headaches if not identified early in the process. However, if t
he contracts are assessed early enough in the acquisition process, a company can reap benefits greater than expected through a due diligence process.
Topics: Manufacturing, Vendors & Contracts
Why Your Manufacturing Company Should Go to Bid During Vendor Negotiations
All manufacturers, distributors and retailers rely on vendors for products and services to support their operations. The relationships are typically governed by long-term agreements and when those contracts are up for renewal, the common reaction is to sign an extension with the incumbent. Assuming service levels have been acceptable, switching costs – especially for anything involving raw materials – tend to be so onerous (testing, certifications, regulatory compliance, etc.) that there’s rarely any appetite for the expense and resource diversion that accompanies a change.
Topics: Manufacturing, Vendors & Contracts
Managing Vendors? Here’s How to Maximize Business Performance
When it comes to maximizing business performance, the primary focus of any vendor management initiative is on cost savings. While the cost savings that can be realized with vendors are critical to an organization, there are associated process and performance benchmarks related to these contracts that can add additional value to the bottom line.
Topics: Business Performance