Contracts Management

Contracts Management

The Case

Manufacturer with over 60 main suppliers faces significant challenges in managing effectively and efficiently the contracts and agreements that are in place.

The Challenge

Following a detailed analysis of the company’s needs and several discussions with the key stakeholders, LPS and the team identified the following issues:

  • The majority of the contracts had expired without been renewed, although those Suppliers were still collaborating with the company
  • There was not a centralized archive for the company’s agreements
  • It was impossible to monitor Vendor performance and in several cases there were not any KPI’s (Key performance Indicators) in place
  • Unutilized Cost reduction opportunities

The Steps

LPS, utilizing international practices and tools :

  • Submitted an integrated proposal for Contracts management with detailed project roadmap, timeline and expected cost reductions. The proposal included the acquisition of a centralized electronic platform for managing the agreements, the development of a standardized contract template, KPI’s (key performance Indicators) for all vendors and the implementation of a simple and automated system to notify the management of any agreements to expire

The Results

The project team, led by LPS, implemented the proposal and:

  • Implemented a simple but comprehensive Contracts Management Electronic platform that provided a full visibility of all contracts and related information to the management
  • Renegotiated and concluded several Agreements – thus all contracts were up to date – with beneficiary for the company terms and conditions
  • Achieved significant cost savings and volume discounts, that – in some cases – exceeded 45%
  • Implemented a new process for Claim Management