In manufacturing, monitoring contract performance is critical to monitoring overall productivity. Regardless of whether a company is manufacturing products comprising a million tiny pieces or heavy duty machinery with several large components, there are likely various contracts with at least a handful of suppliers, if not many more, as well as contracts pertaining to distribution.
Given all of these relationships and the impact that the fulfillment or failure of one contract can have on another, contract management teams must be vigilant in monitoring the entire portfolio to ensure maximal efficiency and productivity. One way to achieve this is by using a purpose-built contract management solution that has features that facilitate oversight, particularly customizable reports that allow the team to monitor progress as it relates to certain parameters.
Review According to Date or Timeframe
For some manufacturers, multiple contracts will be more or less on the same timeline, usually as dictated by the production process. In other situations, however, contracts may need to be staggered to ensure that a certain step or condition is met before the next step is taken. In either scenario, it is important to know exactly what is supposed to happen and when it is supposed to occur. Thus, management teams will need to generate reports according to specific dates or within a specified timeframe in order to ascertain the standing and progress of a production process. With the right contract management solution, this should be a quick and easy report to generate on a weekly or monthly basis.
Analyze by Agreement Type
Depending on the scope and extent of a company’s manufacturing portfolio, there may be a multitude of contractual agreements on file addressing a variety of business matters. As a result, some companies may need to generate reports based on the specific type of agreement, such as supplier contracts, distribution contracts, or licensing contracts. This will help to ensure that redundancies or overlapping services are avoided and may offer insight with respect to consolidating services or suppliers.
Evaluate Based on Costs
Cost overruns are all too common in manufacturing, and thus it is critical to stay on top of the financial aspect of every single contract and closely monitor company resources. Lost or missing deliveries, excessive ordering, and shady contracting partners can all cause a financial leak that may become an unstoppable flood. For companies engaged in high volume contracting, in particular, it is important to reconcile the cost of contracting with the company budget on a quarterly basis, at a minimum, but for companies with suppliers for multiple parts this may need to occur more often. Again, this is an area in which a contract management solution with reporting features can come in handy, and any data generated should be easily exportable to a spreadsheet that can be shared with accounting.
Assess the Portfolio by Selecting Multiple Criteria
The aforementioned scenarios obviously offer a simple snapshot of discrete information, but there are plenty of situations that are far from simple and thus necessitate a more comprehensive review. This is where it is important to ensure that the contract management team has access to a well-rounded solution that allows for the generation of reports based on the selection of various criteria. This may be a combination of date, type, and cost of contract, or it may relate to customized tags that the company created when organizing the contract portfolio. Ultimately, any solution selected should make oversight faster and easier, and customizable reports should provide a clear and concise picture of contract performance as it pertains to the relevant criteria.