Managing and monitoring suppliers' performance

After the decision has been made on what to order from which supplier, it is important to manage the contract appropriately. The type and value of goods or services ordered will determine the level of monitoring and management needed. 

Management and monitoring of a contract should be a two-way process. It is not simply about you overseeing how the supplier is performing.  It can also be about what you, and your institution, are doing.  Where there is an agreed service level agreement between the parties to a contract this will form an important part of the contract management process.

A review of a call-off contract may highlight a high number of relatively low value orders.  This may suggest that the departments using the arrangement should consider looking to see if they could plan their orders better.  For example, raising orders on a weekly or fortnightly basis rather than when a need arises.  Of course, this may not always be possible, however, in general a little forethought can lead to fewer orders which, in turn (when the supplier can see that there is a degree of planning) may lead to reduced prices.  Where there are delivery charges, a reduction in the number of orders will save this cost element.  Remember, in the case of some low value goods, the delivery charges can sometimes be higher than the cost of the goods themselves.

Management and monitoring should, therefore, be about the sharing of information to the benefit of both the institution and the supplier. 

Where problems do arise, these should be dealt with promptly and in an open manner.  Sometimes a problem to one party may simply be caused by a misunderstanding on the part of the other.  For example, you may prefer to have a delivery on a Monday and this is attracting a delivery charge.  It may be that the supplier has to send out a van specifically to make the delivery to your department because they do not normally make deliveries to your area on a Monday.  Having discussed the problem, you may decide that you can take delivery on a Tuesday when there is a van in the area and you save the additional delivery charge and make delivery scheduling easier for the supplier.