Service Level Agreements - what should they contain?

| 0 Comments

Many organisations have introduced Strategic Sourcing techniques to reduce their costs. Normally this is based on a methodology where the 'A Team', comprising top procurement, technical and other skills, completes a cost-management project and then hands these new arrangements over to other staff to continue to manage on a day-to-day basis. After the initial successes management has begun to ask how sustainable these initiatives are, particularly as costs seem to move inexorably upwards...

Alan Low of Purchasing Index's view is that "One of the key differentiators in ensuring continued cost management and service performance is the implementation of a thorough and relevant Service Level Agreement (SLA). "
Most contracts between organizations and suppliers cover the bare bones of the services to be performed and are not adaptable to meet the organization's changing requirements."

"SLAs should be 'living' documents, subject to regular review and amendment and dealing not only with the key performance measures of the service provider but also the performance of the organization's staff to ensure that the service is bought and used as cost-effectively as possible."

"As such the SLA complements the contract and is the basis for providing ongoing KPIs for both parties. It also should be a much more effective means of disciplining (and rewarding) the service provider for under (or over) performance," he says.

"This is particularly vital as service performance normally falls within the remit of line management or users as well as procurement and all of these people have to be involved in the creation and continued amendments of the SLA detail."

What would a SLA contain? Here are some suggestions:

• Meeting schedules between service provider and organization's management and staff, covering reporting requirements, agendas, etc.
• A clear and unequivocal definition of the details of the required service (who does what, when)
• For customer and service provider who are the principle contact staff and their respective responsibilities
• What is expected from the service provider in terms of suggestions and recommendations for service enhancement, cost containment, etc.
• A graduated system for regulating and disciplining non-performance, ultimately leading to the mechanism for dismissal

The author Alan Low can be contacted on 084-890-0005 or alan@pricetrak.co.za.

Leave a comment


 

 

Career opportunites

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is

Logistics Manager

  • <500 000 Gauteng Logistics & Warehousing Procurement Management
Are you an experienced Logistics Manager looking for

Continuous Improvement Manager

  • >500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Warehouse Assistant

  • <500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory
I am currently looking for ambitious Demand Planner,

Internal Procurement Officer

  • <500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Position Available: Internal Procurement Officer Status : New ...More

Supply Chain Officer

  • <500 000 Gauteng Procurement Officer / Specialist Supply Chain
Seeking dynamic candidates to take to the market

Supply Chain Planner

  • <500 000 Free State Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Senior Buyer

  • >500 000 Buyer Gauteng Procurement Management
Tech-Pro specialises in placing professionals in the Supply

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer
Tech-Pro specialises in placing professionals in the Supply

Warehouse Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Supply Chain
Seeking hands on individuals that come from an

Manufacturing Purchasing Specialist

  • >500 000 Procurement Officer / Specialist Supply Chain Western Cape
A leading auto manufacture company based in Cape

Procurement Sourcing Specialist

  • <500 000 Gauteng Procurement Consultant Strategic Sourcing
A Leader in the Supply Chain industry is

Planning Manager

  • >500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for Planning Managers to take into the