Contracts

Contracting private logistics service providers can be a unique opportunity to improve supply chain performance, but that performance depends on investing in and executing long-term logistics contracts.

Contract Life Cycle Management is the process of systematically and efficiently managing contracts creation, execution and analysis for maximising operational and financial performance and minimizing risk.

A contract is termed to be successful when:

• The arrangements for service delivery continue to be satisfactory to both parties, and the expected business benefits and value for money are being realised.
• The expected business benefits and value for money are being achieved
• The supplier is cooperative and responsive
• The organisation understands its obligation under the contract
• There are no disputes
• Efficiencies are being realised

An organisation should ensure that a contract should meet its needs, be achievable and affordable and address the following issues:

• Outcomes of the contract
• Critical success factors
• The possible alternatives, including existing contracts
• The risk including the extent and where they may fall
• Identification of any contingent needs and ramification of proceeding
• Timescale