This topic was discussed briefly earlier and here goes one more time. If you have worked for a few years in supply management you have literally lived through this topic. Naturally, this is a carry over from the old CPM exam and hence routine stuff that you need to be clear about. To start with you must ask three questions:
- Manage your organization: What are we we as the buying organization supposed to do under the contract? Who is going to do it? Do they fully understand that we have signed with a supplier? More than potential legal problems no organization wants to be viewed as folks who do not keep promises or simply are inefficient and drop the ball between departments. For example, if your process involves a goods acceptance and quality report before payment - you should know exactly how this paperwork/computer work gets done. If you have negotiated a 2% disount for payment in 30 days you got to make sure that the payment does come through as contracted.If you need contract modifications, do them.
- Manage the supplier: When large dollar volumes are involved and its service not goods you are buying - it's really important to spell out a statement of work (SOW) and articulate milestones,deliverables and quality expectations in consultation with the supplier and your user department. You have got together a great contract and now you want it to work for your organization and for your supplier on a "win-win" basis. In other words, don't stop thinking "win-win" at the negotiating stage, but think how your user department can succeed and spell out the steps that the supplier needs to take and how the user would monitor success. Don't become hands off at this stage, remain in touch with the user department and supplier throught these large value service type contracts.
- Conflict/dispute resolution: You want the contract to complete with great success and satisfaction all around and that's where the two above steps are supposed to help. But sometimes things don't work and you have to terminate the contract. A mutual "for convenience" parting with the supplier is desirable. Here the classic analogy is with the human marriage and divorce. The latter can become rather bitter and if you are a great supply manager, you should ideally be able to avoid it by working hard at the earlier steps.