Importancae for a procurement manager to understand contract formation

Iron ore and coal were shipped in by Great Lakes steamers and railroad, iron ore melted to produce iron, and then processed into steel. Rolling mills, forges and assembly workshops converted the steel into springs, axles and car bodies, foundries poured molten steel to produce engine blocks and cylinder heads.

Importancae for a procurement manager to understand contract formation

The article attracted a high level of interest and is still frequently referenced.

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So in view of the dramatic shift in economic conditions, I thought I should revisit this topic and answer two questions: Has the importance of the role changed? Have the tasks or contribution of a typical contract manager been impacted by the dramatic shift in economic and business conditions?

The Importance Of The Role The original article highlighted the extent to which a global networked economy had elevated the role of contract management within high-performance organizations.

In addition, contract skills have been much in demand as a result of the need to renegotiate many existing relationships and improve the standards of governance over others. The US administration has not been alone in highlighting the challenge of building sufficient contract management skills to 0versee the barrage of new capital projects being funded by the public purse, as well as ensuring the success of those already underway.

It is also about ethics, integrity, the management of reputational and regulatory risk, and ensuring on-going competitiveness. So the role of a contract manager has been made substantially more important — and more strategic — as a result of the economic crisis.

In particular, there is a need to ensure that business opportunities are not stifled by risk-aversion; and that contracts achieve positive economic outcomes. As mentioned above, the expectations of executive management are lkely to increase. They need contract managers who can deliver results and keep the business out of trouble.

Hence the need for balance between compliance and innovation. To the extent that new regulation occurs, contract managers will be expected to understand it and ensure that it is respected.

But many business leaders will be hoping that they can run with a system of self-regulation — and this places even more emphasis on the role of the contract manager.

Contracts Articles Formation

In order to remain competitive, businesses must remain flexible; the rules, practices and procedures must make both ethical and economic sense.

The original article highlighted that high-performance contracts groups undertake both a strategic and operational role. With that visibility come increased demands and expectations for performance and value — which in turn means measurements.

The recent G20 meeting offered us a sense of the importance of the contract management role and some of the parameters that will surround its performance. In their final communique, they set out future principles of governance for the financial services sector, including the following: Contract Management will be targetted with the tasks of protecting reputation risks through ethical contracting and relationship practices; yet at the same time with the need to ensure competitiveness through innovative terms and adaptive processes.

It will increasingly be a life-cycle role, which means establishing the right contractual framework and then overseeing its successful management and delivery of expected results.

Importancae for a procurement manager to understand contract formation

It will be essential to ensure they have strong market awareness, without succumbing to the short-term demands of individual transactions. I have highlighted the types of measurement that should apply to contract management in previous articles, but they include things like cycle time reduction, the percentage of deals enabled through e-commerce; the economic value of term alternatives and innovations, the reduction in claims and disputes.

Good contracting is fundamental to any healthy 21st century business — and it requires a new breed of contract managers who are commited to professionalism.Using the Webster library, locate and read an article on contracts. Based on your reading of the article, post a comment on why it is important for a procurement manager to understand contract formation.

Although I was unable to reference much details in the Webster University Library, I did find a lot of details on the Defense Acquisition . Understand your role in procurement management. Contract administration.

The bottom line is that in most organizations the project manager should understand the basics of procurement. Route 2 - Contract & Supplier Management. the Organisation’s procurement department contract and market knowledge improves, and benefits future contracts innovation or joint ventures if you do not understand the detail behind the contracts your Organisation has with this supplier, or how they’re performing day to day.

The Role Of A Contract Manager – Revisited. April 14, It emphasized the extent to which increasing complexity was demanding greater discipline in the formation and management of trading relationships – and how the contracting process is a key mechanism for ensuring such discipline.

The Contracts and Strategic Procurement. Importancae For A Procurement Manager To Understand Contract Formation Contract and procurement are imperative operations that should be done appropriately for the success of an organization.

More often than not, people who are in judge of procurement do take these activities less seriously (MOLENAAR, ). The Value of Contract Management Fundamentals for Every Project Manager.

This is a common misunderstanding of the fundamental importance of contract formation and management: when a company contracts out the provision of any goods or services, the risk to them increases.

The manager of today must know about procurement and .

Understand your role in procurement management - TechRepublic