This book takes the whole lifecycle of a purchase from initial concept or need through all of its stages to final end of contract and places each stage in relation to the strategic and operational choices offered to managers. It emphasises the need to actively manage the contract process and keep all of the interested parties fully involved and informed at all points. A particular feature is the report of work performed under contract to the Royal Bank of Scotland Group to benchmark contract management practice which produced a new model and managerial guidance.
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Following an early career formation as a mechanical engineer in electricity generation and then as a production manager in consumer durable production and a variety of academic posts, initially in the UK and then internationally, I began (in the early 1980s) to research topics associated with operations management, Japanese management, customer supplier relationships and supply chain management.
The consulting company I created in 1990, SCMG Ltd, continues this work to this day but it was not really until David Barton of Royal Bank of Scotland Group Operations Contract Management commissioned the University of Southampton and SCMG Ltd to explore what best practice in Contract Management was in practice that the understanding built up over these years found a new and appropriate home.
We had been focusing on the possibilities of managing the customer supplier relationship as part of a sourcing strategy to select suppliers with whom the buyer could have a productive interaction but the work with David and his team demonstrated the gap in our approach (and in many businesses) which occurs if we do not properly connect the sourcing decisions with the contract management ones. Our customer supplier relationship understanding and models helped inform what good contract management practice was. This was supported by extensive desk and practical research with RBS to inform the development of a Contract Management Benchmarking process which has been completed by around 150 organisations to date. Two conferences have been held with representatives of many different organisations participating and case study materials are being generated to take our collective understanding forward to deliver better contract performance results in the organisations. Thanks are also due to David for permission to use the two diagrams in Section 5 Operate which section discusses the benchmarking process and provides links to the benchmarking survey. The interaction with RBS Group will continue to extend and develop and I believe that what David started will have a major impact.
This book has grown out of my reflections of this new understanding and builds on an increasing awareness that we need to manage our businesses in ways which recognize more explicitly and clearly the reality of complex sets of interactions between groups inside our companies as well as in the wider network of interacting and interdependent organisations outside our immediate boundaries.
Please see this publication as part of a wider work in progress and please consider joining us in this most exciting journey.
Douglas Macbeth
December 2012
- Preface
- Introduction
- Need Identification and Requirement Specification
- Making or Doing Internally or going to the Market
- Sourcing / Selecting the Supplier and Contract Award
- Implementing the Contract Award
- Operating the Contract
- Options at the end of the Contract
- Lessons Learned for the Future
- Summary
- References
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