The negotiation process for expiring manufacturer vendor contracts often poses unique challenges. For example, those that have an existing relationship with the incumbent supplier need that relationship to remain constructive, especially since it will be ongoing once the contract is signed. When negotiating topics like price, this can prove particularly difficult.
Topics: Vendors & Contracts
The typical manufacturer has dozens, if not hundreds, of contracts in place with numerous suppliers that support its operations (both direct and in-direct spend categories). As a result, staying on top of the expiration dates for all of those agreements to maintain an effective renewal process can present a significant challenge. At a minimum, doing so is simply best practice, but in other cases, such due diligence may also be a regulatory requirement or a board mandate.
Topics: Vendors & Contracts
For all procurement executives that oversee vendor relationships, see if this scenario seems familiar: A long-time vendor visits your facility and, unsolicited, offers a contract extension along with attractive incentives; e.g., prebates, rebates, pricing discounts, etc. To date, you’ve enjoyed a good relationship with this partner with no plans to break the contract at expiration, so this provides an opportunity to look like a hero to your facility, bringing in an unexpected windfall to fund other priorities. What could be the downside?
Topics: Vendors & Contracts
