Executive Briefings

Managed Supply Chains Require Special Contracts

One of the most important differences between traditional supply management/supplier relations and managed supply chains is the emphasis on active collaboration among supply chain partners. Of course, the idea that suppliers and their customers may collaborate is not new--what is new is the elevation of collaboration from an informal, ad hoc process to a formal, actively managed process. As with any business relationship, a well-drafted contract can provide the blueprint for a successful strategic sourcing relationship. If suppliers and their customers believe that collaboration has become an essential part of their relationship, then contract managers should look for ways to incorporate those obligations to collaborate into the written agreement between the parties.
However, while there is no shortage of materials to help contract managers draft traditional sale-of-goods contracts, or even contracts governing the use of electronic data interchange between trading partners, it may be hard to find assistance drafting contract terms to govern the collaborative aspects of managed supply chains.
Source: Inside Supply Management, http://www.ism.ws

One of the most important differences between traditional supply management/supplier relations and managed supply chains is the emphasis on active collaboration among supply chain partners. Of course, the idea that suppliers and their customers may collaborate is not new--what is new is the elevation of collaboration from an informal, ad hoc process to a formal, actively managed process. As with any business relationship, a well-drafted contract can provide the blueprint for a successful strategic sourcing relationship. If suppliers and their customers believe that collaboration has become an essential part of their relationship, then contract managers should look for ways to incorporate those obligations to collaborate into the written agreement between the parties.
However, while there is no shortage of materials to help contract managers draft traditional sale-of-goods contracts, or even contracts governing the use of electronic data interchange between trading partners, it may be hard to find assistance drafting contract terms to govern the collaborative aspects of managed supply chains.
Source: Inside Supply Management, http://www.ism.ws