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
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