How to Use Contract Management Software to Improve Your Supply Chain

Improve Your Supply Chain

Improving the efficiency of a supply chain is no easy task. There are many moving parts to deal with, such as dealing with obligations, tracking vendor performance, attempting to lower risk, and improving efficiency. These are things that supply chain teams have to consider regularly.

With this in mind, all of this becomes much more manageable with the appropriate solutions and tools in place. Specifically, using the right contract management software. This software can help improve the overall performance of the supply chain and working practices between your business and outside suppliers or vendors.

 

5 Benefits of Using Contract Management Software with Your Supply Chain

 

1) Less Reliance on Paper Processes

In the past, supply chains were notoriously reliant on paper-based processes. They tend to be very disruptive, especially when teams are spread out over different locations. They can also be costly, and cause unnecessary delays because each person has to wait until they’ve received the contract from the previous person. Managing contracts digitally enables supply chain issues to be dealt with straight away. Moreover, this type of system ensures that each person has the most up to date version of the contract. As a result, conflict next steps are easier to implement.

 

2) Contracts Stored Centrally, Making them Easier to Access

When contracts are stored in a central online system, they become easier to access and review. Keeping contracts in places like filing cabinets or email inboxes is inefficient because it wastes time. Using contract management software streamlines the documentation process. Everyone who needs to access contracts can do so no matter where they are. There is no need to send emails back and forth or worry about contracts getting into the wrong hands. Contract management software also improves transparency for relationships between vendors and contract status.

 

3) Contract Dates Become Easier to Manage

If you’re trying to manage your supply chain portfolio better, an essential part of that is to track and monitor critical dates and deadlines. Using the contract repository, important dates can be found, then the appropriate action taken. For example, when someone is trying to determine if a contract should be renewed, renegotiated or terminated, based on the value of the contract, or supplier performance. Contract management software helps with visibility. The lead time before expiry of a contract is easily accessible, so users can determine how long they have to make a decision before the opt-out window closes. In this time, a conclusion can be made as to whether to use another vendor, who may be more cost-effective, or simply able to do a better job. Having important contract deadlines and dates at a glance also lowers the chances of spending unnecessarily or suffering supply chain problems.

 

4) Details are Quicker to Find

Thanks to features like artificial intelligence and OCR, it’s now easier to search for specific information throughout a contract such as dates, clauses, terms and precise language. Previously, this could have taken days or even weeks, depending on the volume of contracts being dealt with. Now, thanks to contract management software, it’s much easier to complete basic tasks, leaving staff to focus on more high-value activities.

 

5) Create More Valuable Reports for Stakeholders and You

One way that contract management software is better than manually managing contracts is that detailed information for each agreement can be viewed. Specific contract information can be tagged using data points, meaning that when reports are run, that information is included in them. Using contract management software makes it easier to see contracts which are due to expire soon, as well as the number of contracts containing force majeure clauses, or the number of different contract types. It provides a quick and easy way to see where suppliers are located, which is useful in working out whether your organization is over reliant on certain ones. It provides a way to measure contract performance and identify weaknesses in a supply chain, as well as identifying the things that work well. Bottlenecks can be lowered using contract management software, and risks can be identified. For the best chance of success with contract management software, look for something which is both affordable, yet usable for staff within your organization.

 

Advantages of Managing Your Supply Chain with Contract Management Software

 

  1. Unlike manually managing contracts, contract management software is affordable and quick to use and helps prevent disruption. Supply chain problems can be dealt with right away, everyone is kept continually updated, and conflict can be better dealt with.
  2. Information is easier to access and review when using contract management software. Everything is stored centrally, meaning contracts can be accessed from virtually anywhere. The need for sending numerous emails is eliminated, which improves security, and the status between vendors and contracts is more transparent.
  3. It is quicker to find critical dates using contract management software. Users are more aware of when a contract is going to end, which makes decision making easier. Additionally, there’s less chance of supply chain problems or wasteful spending.
  4. Thanks to features like AI and OCR, is easier to search contracts using contract management software than it is to do this manually. It’s also easier and quicker to complete basic tasks, giving staff more time to deal with important business matters.
  5. Contract management software provides essential information at a glance. Information can be tagged throughout contracts using data points, which is included in reports. It’s easier to determine expiry dates using contract management software, as well as measure contract performance. Furthermore, weaknesses in the supply chain are more prominent, and fewer risks or bottlenecks are likely to occur.
  6. Unlike manual contract management, an automated solution is quick to learn, and depending on which supplier you choose, it can be extremely cost effective.