Effectively managing your supply chain is hard work. Between keeping track of vendor performance and obligations, developing processes and procedures to reduce risks, and looking for opportunities to operate more efficiently, there are a lot of moving pieces that supply chain teams have to account for on a regular basis. Finding the right set of tools and solutions to make this process more manageable is one of the biggest keys to success.
Contract management software is one solution that can help you improve supply chain performance and the way you work with both internal partners and outside suppliers and vendors. Here are some of the ways contract management software can help you optimize your supply chain.
Move away from paper-based processes
Supply chains have traditionally been too reliant on paper-based processes, which can lead to costly disruptions when all parties aren’t able to be physically present in the same location. Relying on paper documents can also cause unnecessary delays as you wait for contracts to pass from one person to the next for a wet signature.
Transitioning to digital records and contracts will also make it easier to respond to supply chain disruptions or other issues that arise by ensuring all parties have a copy of the latest version of the agreement to understand conflict resolution next steps.
Store all of your contracts in one easily accessible location
Storing all of your contracts in a centralized, online system provides a simple and efficient way to access and review key supply chain contracts and the impact they have on your business. No need to waste time digging through filing cabinets, scrolling through email inboxes, or waiting on colleagues to locate a final version - you now have a single source of truth for all contracts. This allows your procurement team, contract managers, and members of your legal department to all have secure, online access to your portfolio of vendor agreements, eliminating the need to email your contracts back and forth between colleagues, which increases the potential for your contracts to end up in the wrong hands.
With one central source of truth for your supply chain agreements, you can increase transparency into the status of contracts and vendor relationships.
Stay on top of contract dates
When you’re looking to get a handle of your supply chain contract portfolio, monitoring and tracking critical dates and deadlines is a requisite part of the process. Identifying these important dates within your contract repository will allow you to then take meaningful action, like running reports for upcoming end dates and reviewing these contracts in detail to determine whether they should be terminated, renewed, or renegotiated based on things like supplier performance and contract value. With enough lead time before a contract expires or an opt-out window closes, you can conduct a detailed analysis on the agreement and determine if another vendor can get the job done more efficiently or cost effectively.
Ensuring that all key contract dates and deadlines are on your radar will help reduce supply chain risks and unnecessary spending.
Find specific contract details instantly
Contract management software with OCR and artificial intelligence features lets you easily find specific language, dates, terms, and clauses in your contracts - a task that, if performed manually, could take days if not weeks to accomplish depending on the volume of contracts. This is especially useful when trying to quickly find the value of a contract, the agreed upon lead time to produce purchased materials, or the default terms if your supplier commits a breach of contract.
By adopting and implementing the appropriate contract management software, you can decrease time spent on basic contracting tasks and focus more on higher value supply chain activities.
Report on what you and your stakeholders care about most
One of the biggest benefits of contract management software is the ability to quickly see detailed information about the contents of your agreements. With the flexibility to run reports on any data points tagged in your agreements, you can easily see which contracts expire in the next 30 days, how many active Fixed Price, Time & Material, and Cost Plus contracts you have, or which agreements contain force majeure clauses, for example. This functionality also gives you a quick and easy way to see all of your suppliers and the countries where they’re located to determine if your supply chain is too reliant on any one country or region.
When you have the ability to measure contract performance, you can identify and correct weaknesses in your supply chain, and expand upon the areas that are already working well and are positively impacting your business.
Contract management software can help you find opportunities to reduce supply chain risks, bottlenecks, and expenses considerably faster than relying on manual methods. Choosing a solution that prioritizes useability and affordability will allow you to start seeing results in less time while keeping costs down.