Welcome To
The Bottom Line

SRM Perspectives on Key Industry Trends

Never Sign a Vendor Contract Amendment Without Vetting It

Posted by Patrick Goodwin, President on Jan 16, 2018 7:00:00 AM

Amendment-215155-edited.jpgVendor 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.

Read More

Topics: Vendors & Contracts

Why You Should Manage Your Vendor Contracts During Budget Season

Posted by Ben Mrva on Jan 9, 2018 7:00:00 AM

Why You Should Manage Your Vendor Contracts During Budget SeasonFor 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.

Read More

Topics: Vendors & Contracts

Less is More: A Case Study in Manufacturing Vendor Contract Management

Posted by Jim Kurtz on Dec 19, 2017 8:00:00 AM

 

Less is More-843263-edited

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.

Read More

Topics: Manufacturing, Strategic Sourcing, Vendors & Contracts

Proceed with Caution on Vendor Contract Changes – A Real World Example

Posted by Jim Kurtz on Dec 13, 2017 11:00:00 AM

Short TermLong Term.jpgIn 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.

Read More

Topics: Strategic Sourcing, Vendors & Contracts

Vendor Contracts: Identify Cost Savings Initiatives in Procurement

Posted by Michael Carter on Oct 5, 2017 1:00:00 PM

 Cost Savings Initatives 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.

Read More

Topics: Manufacturing, Vendors & Contracts

When to Use Corrugated Packaging Box Manufacturers vs. Distributors

Posted by Jim Kurtz on Sep 27, 2017 9:00:00 AM

corrugated packaging box manufacturers

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?

Read More

Topics: Vendors & Contracts

A Case Study in Manufacturing Vendor Contract Management

Posted by Jim Kurtz on Sep 13, 2017 9:00:00 AM

Less is More-843263-edited.jpg

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.

Read More

Topics: Strategic Sourcing, Vendors & Contracts

Considering an Acquisition? Don’t Overlook Your Vendor Contracts

Posted by Brad Downs on Jul 18, 2017 9:00:00 AM

On the trail-902736-edited.jpg

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.

Read More

Topics: Manufacturing, Vendors & Contracts

Why Your Manufacturing Company Should Go to Bid During Vendor Negotiations

Posted by Patrick Goodwin, President on Jul 12, 2017 1:56:14 PM

Go to Bid-356034-edited-476114-edited.jpg

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.

Read More

Topics: Manufacturing, Vendors & Contracts

What to Expect in Supply Contracts When Pulp and Paper Commodity Price Increase

Posted by Jim Kurtz on May 2, 2017 7:33:54 AM

This past September, the pulp and paper marketplace experienced its first price increase in nearly four years. Originally announced at $50 per ton, in October suppliers ultimately settled for a hike of $40/ton (roughly 6.5%, from $610 to $650/ton) after weathering some customer pushback. For most users of liner board, this translated to a 6-8% rise in their material costs. For those operating without long-term contracts, the increases were higher.

Read More

Topics: Vendors & Contracts