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What should you do when a standard supply contract is not available?

Posted in Purchasing and Supply Chain on November 18, 2011
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Patty is the Procurement Manager at a paper manufacturing company.  She has been tasked by the operations group to find new sources for packaging supplies due to quality problems they have been faced with over the last few months.  Patty has identified four prospective suppliers in the industry and has requested that each send their standard contract for review prior to meeting with them.  During this process she found that only one of the four suppliers has a standard contract to send to her.  The other three have nothing and the supplier they used in the past did not have a contract on file either.  Patty needs to identify what the industry standards are and the needs of her operations group so that she can make the best purchasing decision.

  • What should Patty do first? 
  • What internal resources should she include in her decision making process? 
  • At what stage should she involve the operations team in the discussions with suppliers?

Comments (1)

SalesAddict posted on: April 24, 2012

As a sales person I get asked to provide supply contracts on a regular basis. If her suppliers don''t have one I think she should insist that if they want to do business with her they need to provide one, just to see what they put in it so that she can compare one vs another. She can then take the best elements of each and develop her own contract that the suppliers have to come back to and commit to her requests. I would have her call it terms of sale to include quality promises and processes, returns and refunds, specification parameters, packaging, delivery terms, pricing, and anything else they can offer to win the bid. In the end Patty needs to own the contract, but if she takes the best of each, she will get the best deal.

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