Contract Management

Perfect delivery: the new rules for survival, innovation and growth

SteveBanker_100.jpgBy Steve Banker, Vice President: SCM, ARC Advisory Group

Customer loyalty begins with excellent service and timely delivery. Companies have come under pressure to unify their buying experience across channels, capture orders easily, and deliver them rapidly and accurately.

When it comes to gauging the loyalty of an organisation's customer relationships, the net promoter score (NPS) survey typically represents best practice. The NPS is correlated with revenue growth and calculated based on responses to a single, simple question: how likely is it that you would recommend this company/product/service to a friend or colleague?

Improve contract compliance by thinking like sales...not procurement

Kelly_Barner.pngBy Kelly (McCarthy) Barner

Call us crazy but we reckon Procurement would be better off looking at the Contract Management process the same way sales does...

If you're anything like me as a procurement practitioner, you think of our end-to-end process in a linear fashion. It usually starts with spend analysis or some other source of information (budget, ERP, BI system output, etc.) and ends with Contract Management and/or Supplier Performance Management. For us, this is completely logical because the sub-processes that we view as the most "active" portions of procurement - strategic sourcing and negotiation - have been dealt with at this point.

In Contract Management and Supplier Performance there is something of a phased handoff back to the budget owners. After all, the spend we bring under management is rarely associated with a procurement need; we are often just temporary custodians of someone else's spend.

Procurement in a pandemic: top tips for tricky issues

AmyRyburn_LisetteHood_200.pngBy Amy Ryburn and Lisette Hood, from commercial and public law firm Buddle Findlay

Procuring organisations (buyers) are currently grappling with a number of tricky issues arising from the COVID-19 pandemic, including issues relating to both live and planned procurement processes.

Buyers who are facing significant uncertainty, or who are without the resources to effectively staff procurement processes at this time, are faced with difficult decisions, such as whether to continue with live procurement processes or whether to commence new ones; what to do if procurement processes are cancelled or delayed; and whether and how to address the influence of COVID-19 on tender documentation (in relation to the tender process itself and the contract that is released - in particular any proposed force majeure clauses).

Is COVID-19 a force majeure event?

Tanya_Waksman_100.pngBy Tanya Waksman

Does coronavirus (COVID-19) have any effect on the rights and/or obligations of parties in contractual relationships under South African law? Tanya Waksman, of legal advisory firm, Eversheds Sutherland, considers this question in this month's SmartProcurement.

Why standard contract terms can be bad for you

KateVitasek_100.jpgBy Kate Vitasek

If your company is like most, it promotes 'boilerplate' contracts or, at a minimum, pushes for standardised terms, such as contract length, warranties, a 30-day termination of convenience clause or 90-day payment terms. While this may make your lawyer and Chief Financial Officer (CFO) happy, Russell Korobkin suggests that using standard contract clauses is a bad idea.

The catch-22 of outsourcing relationships

KateVitasek_100.jpgCustomers and suppliers alike maintain that they value innovation. But, far too many outsourcing contracts are full of perverse incentives that inherently disincentivise suppliers from investing in innovation. The result? A catch-22 where outsourcing relationships become a race to the bottom, a situation where organisations think they are spurring on innovation but, in reality, they are fostering the status quo.

Kate Vitasek, Professor in Supply Chain Management at the University of Tennessee, unpacks how transaction-based sourcing models are preventing innovation and shares how to move away from them in supply relationships.

Leveraging effective contract management in procurement departments

EmanAbouzeid.jpgThe key processes and activities involved in contract management are fundamental to making sure you and your suppliers know your responsibilities under an agreement and that everyone meets those obligations.

Eman Abouzeid (CSCP, CIPS), a procurement and supply chain professional with global experience, explores the benefits of having effective contract management in your procurement department, in this month's SmartProcurement.

Procurement in 7 memes

DistractedBoyfriend_small.jpgThey say a picture tells a thousand words. How about a procurement meme?

Okay, millennials. Strap yourselves in, because Hugo Britt, Content Manager at Procurious, is going to attempt to meme. Is meme even a verb? Perhaps not, but that isn't going to stop him.

For older readers who don't really know (or care) what memes are, don't worry - Britt's got you covered. Whether it's Bad Luck Brian, Kermit Sipping Tea, or King Leonidas screaming "SPARTA", Britt will attempt to add a bit of context around the meme before applying a Procurement gripe to each.

Join Britt at Smart Procurement World Gauteng in September, where he'll present procurement's "guide to blockchain technology and how it will change our world". He'll look at early applications of blockchain in supply chain, specifically automotive, freight and logistics.

Logistics: an opportunity for competitive advantage

TafaraSvosve.jpg"What business strategy is all about is, in a word, competitive advantage. The sole purpose of strategic planning is to enable a company to gain, as efficiently as possible, a sustainable edge over its competitors. Corporate strategy thus implies an attempt to alter a company's strength relative to that of its competitors in the most efficient way" (Kenichi Ohmae, 1982).

Recessionary markets and increasingly fierce global competition are two of the main challenges facing organisations today in their quest to gain and sustain competitive advantage. However, providing a level of service that stands above the rest can rarely be achieved if a supplier fails to focus on its logistics strategy, argues Tafara Svosve (MSc Supply Chain Management; CMILT). A new management approach that recognises and locates logistics in its rightful place on a strategic platform (rather than merely a support activity) is required if organisations are to achieve and sustain competitive advantage, writes Svosve in this month's SmartProcurement.

Contracts: Paying for what works

SusanDeWitt.jpgAre performance clauses and outcomes-based contracts the answer?

Dr Susan de Witt from the Graduate School of Business at the University of Cape Town unpacks contract performance measurement in this month's SmartProcurement.

Pushing the "easy button" on self-service sourcing - Q&A with Salesforce and Oracle's former CPO

GregTennyson.jpgGreg Tennyson is the CPO of VSP Global, where he leads transformative change. He is the former VP and CPO (source-to-settle and expense-to-settle) at Salesforce and Oracle.
In part 3 of the conversation with ScoutRFP, Greg talks tech and "self-service sourcing" in the final segment on changing sourcing behaviours.

What is affecting procurement? Where is the profession going?

DuncanBrock_SPW.jpgThere's a lot going on. The changing and challenging times we currently face are probably greater than they've ever been. What is the implication for procurement? What do we need to keep abreast of and continually work on?

Duncan Brock, Director of the Chartered Institute of Procurement and Supply, offered his insights during his opening address at the SmartProcurement World Gauteng conference in September.

Integrity and competence a must in government procurement


Integrity in government procurement must be held to the highest standards on every RFP and tender issued

Stephen_Bauld.jpgStephen Bauld deals with so many issues related to the integrity of the request for proposal (RFP) process every week. As a government procurement expert, he is concerned about the way municipal procurement staff understand the policies and procedures they need to follow to issue documents to suppliers and contractors.

Visitors and exhibitors flock to the Smart Procurement World conference

 

FirstPic.jpgAs the second day of Smart Procurement World conference unfolds, more than 1000 visitors have come through to equip themselves with knowledge about procurement, supply chain, enterprise development and how to support Small, Medium and Micro Enterprises (SMME).

“Google can give you so much, but by attending this conference, I am hoping to find relevant suppliers, particularly black-owned female companies. We want our company to be in line with the B-BEEE Codes and thank goodness for this platform where one can source active and relevant suppliers,” said Tamsyn Louw, procurement professional attending the conference.

Zimbabwe procurement bill to correct procurement practices

 

robert-mugabe-un.jpgTo curb “unsound" procurement practices that are “slowing down” Zimbabwe’s economic growth a new Procurement Bill would be drafted and tabled in Parliament before the end of the year, President Robert Mugabe announced in his State of the Nation address.


The Bill will incorporate COMESA procurement guidelines which emphasise devolution of power to award tenders to procuring entities. These organisations will include government ministries, parastatals, state enterprises and local authorities, Mugabe said.

Department of Economic Development's R650-million procurement expenditure to boost township economy

 

lebogangMaile.jpgThe Department of Economic Development (DED) is finalising a partnership that will pump R650-million procurement expenditure into various townships across Gauteng, said Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile.


The partnership is spearheaded by retailer MassMart and will see the establishment of 500 retail shops within Gauteng townships. The project will be piloted across six Gauteng townships: Katlehong, Attridgeville, Sharpville, Randfontein, Alexander and Khutsong.

Managing supply risk - asking suppliers to share your supply risk

 

Supply_Bullwhip_effect.pngEvery business faces risks - the probability of events occurring - that can or will present challenges to their operations. Risk management is the practice of using processes, methods and tools to identify the level of probability, and then manage the ensuing risks.


In practice, this means identifying in advance what can go wrong in relationships between buyer and supplier. Failing to do this means you will be under-prepared and get some unwelcome surprises. A risk management strategy in procurement allows you to anticipate what may go wrong, thereby preventing disasters or serious financial losses.


Insuring is one way of mitigating risk. The question is who pays for this, the buyer or the supplier? Asks Elaine Porteous, in this month’s SmartProcurement.

Supplier cash flow vs Corporate promises

 

SiphoPilime.jpgMost inexperienced, small suppliers are so eager to supply that they hardly pay attention to the words ‘payment terms’. Yet the timing between cash outflows (as a business extends its service or sells a product) and inflows (as it receives payment for the said service or product) is the single most important factor in business growth, success and sustainability.


Considering that articles and research papers have proven that a lack of cash flow is one of the significant causes of the demise of small businesses worldwide, Sipho Pilime, The Hope Factory business mentor wonders if suppliers and buyers are willing to put payment terms under the microscope and admit that both sides have responsibilities in resolving the early-payment-saga, in this month’s SmartProcurement.


 

 

Career opportunites

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One of South Africa's leading, mining companies is