REDEFINING CONTRACT MANAGEMENT PRACTICES

Abstract

Led by technological innovations and digital disruption, business models have changed dramatically, and organizations have evolved their products and services to remain competitive with most organizations moving to servitization to deliver better customer services. The focus now is on delivering core business functions whilst partnering with their supplier for delivery of non-core business functions. Contract management has become a key driver to deliver such business models. This research is based on a similar scenario whereby one of the leading industrial products manufacturers embarked on a journey to transform its global logistics. It focuses on how good practice contract management principles helped the organization to choose the right business partner at a reduced cost whilst delivering improved service levels and better quality. The study revolves around supply chain management principles. It has a qualitative design and is mainly primary in nature. It explores different principles that gave confidence to both parties to have the required flexibility and agility in case of any future changes in the business model. The focus of the business partnership was not only to deliver in-year cost savings but also to de-risk the organization from future commercial exposure. Although the case study is about the industrial products sectors, however, the same guidelines and principles can be adopted across multiple industries. The fact that apart from the amalgamation of pre-existing literature, it also deals with a real-life scenario that makes it more thorough and substantial in nature.