Uploaded byAdhe Priyambodo
IPPC Discussion - Contract and Supplier management
The document discusses contract and supplier management in procurement. It provides an overview of the procurement process and outlines why contracts should be used to drive performance, provide legal certainty, and reduce risk. It then describes simple and advanced approaches to contract and supplier management, including using a Pareto analysis, portfolio matrix, and supplier preferencing matrix to prioritize efforts. Key aspects of contract management discussed include defining KPIs and SLAs, conducting periodic reviews, and focusing on continuous improvement. Developing proactive, effective, and assertive behaviors is also emphasized for building collaborative supplier relationships.
More Related Content
Similar to IPPC Discussion - Contract and Supplier management
IPPC Discussion - Contract and Supplier management
- 1.
- 2. Adhe Priyambodo Working history ProcurementManager ASEAN, PT Shell Indonesia Direct Procurement Manager, PT Frisian Flag Indonesia RM Procurement Manager, PT PZ Cussons Indonesia Raw Material Manager, PT Sepatu Bata, Tbk Material Planner, PT Henkel Indonesien 2 About me Procurement and supply chain management professional with 15 years experience in various industry of multinational companies. Education Engineering Physics, ITS Surabaya Chartered Institute of Procurement and Supply (CIPS),UK adhe.priyambodo@gmail.com Adhe Priyambodo priyambodo.net
- 3.
- 4. Procurement Process 4 Tender AwardPre-award process Post-award process Defining needs Supplier selection Market analysis Contract Management Supplier Management+ Making surethat goods/ services are delivered as per contract agreement Forming & developing relationship with supplier for long term mutual benefits
- 5.
- 6. Why should usecontract? 6 Drive performance Legal certainty Reduce risk Support collaboration Implied term vs Express term Battle of Forms Performance management • KPI • Target • Consequences • Breach • Liabilities • Intellectual Property • Dispute • Transparency • Communication
- 7. Implied term vsExpress term 7 Implied terms Express terms • Sale of Goods Act • Good being fit for purpose • Negligence • Confidential breaches • Specification • Delivery details • Payment term • Warranty • Contract period • Governing Law
- 8. Battle of Forms 8 SupplierBuyer RFQ Quotation PO Delivery Note Invoice Good Receive Order Confirmation
- 9. How? : Definepriority & focus 9 Simple Advanced Pareto/ ABC Level of Competition Portfolio Matrix Supplier Preferencing Matrix
- 10. Monopoly Oligopoly Monopolistic Competition Perfect Competition Low High SimpleApproach 10 Pareto/ ABC Level of Competition 100% %ofspend % of supplier 50% 80% 95% 100% 0% 50%20% A B C More attention Less attention relationship focus to maximize add value relationship focus to supply security
- 11. Advanced Approach 11 Portfolio Matrix Spend Supplyrisk High Low High Strategic Low Bottleneck Leverage Routine Supplier Preferencing BusinessValue Attractiveness High Low High Core Low Development Exploitable Nuisance Focus on long term partnership Focus to drive value realization Focus to simplify buying process Focus to continuity & mitigate risk Develop backup/ exit strategy Develop partnership
- 12. Practical Activity 12 Include contract draftin tender document Repetitive & High-value goods/services covered with contract Use SLA or KPI in the contract Periodic review Continuous Improvement Proper supplier integration
- 13. SLA & KPI 13 Service Level Agreement (SLA) Minimumquality of service that meets business needs Based on output Generally offered by supplier May have tiers Key Performance Indicator (KPI) Motivate supplier (Incentive De-incentive) Early identification of risk Improve quality Improve communication S.M.A.R.T Example: • On-time/In- full • Reject rate • Safety compliance • Waste reduction
- 14. Periodic Reviews 14 Frequency AgendaParticipant Quarterly Operational Review Procurement + User + Supplier Yearly Strategic Review Include Business Leader of both parties Agenda KPI achievement review Demand forecast & supply capability Business & market update Continuous Improvement initiatives
- 15. Continuous Improvement 15 Specific Objectives andTargets Project base Milestones & Timeline Allocated resources KPI achievement improvement Example of Focus Waste reduction Sustainability / CSR
- 16. Behaviour to develop 16 Proactive Supplierrelationship do not develop by their own → They need input by both parties & proper planning Effective Communication • Organizational & personal • Consider culture • Listen, Open mind, Honesty, Empathy Assertive Know and able to express what we want at the same time willing to listen of others
- 17.
- 18. Credits:Presentation template bySlidesCarnival 18 Thanks! Let’s discuss...