Agreements – Vendor Managed Inventory
When it comes to the contract portion or contract piece for consignment inventory or vendor managed inventory you will want your form to include details on how the inventory will be managed both by the Consignee and the Vendor. Items like storage, replenishment, returns are just a few areas you need to cover.
Before we get too deep into details lets clarify or define the parties typically involved in a consignment transaction. Consignee is the business, person, agent, organization which merchandise is consigned or Consignee is the receiver of the goods not yet owned. Consignor is the Vendor or company which owns the inventory until it is used or sold by the consignee. Now that we have that straight, lets move into some areas you should address in your vendor consignment agreement.
Inventory Management: Consignee shall store and manage products produced or supplied by Vendor (the “Products”). All products shall be delivered to Consignee on a consignment basis. Consignee and Vendor shall mutually agree on which Products will be consigned to Consignee under this Agreement before the Products are delivered to Consignee’s Facilities. For purposes of this Agreement, all Products which have been delivered to and received at the Facilities shall be referred to as “Managed Inventory”.
Another piece which will need to be negotiated or identified is where you will store or house the inventory
Space Allocation. Consignee shall store the Managed Inventory at the ________________ (location). Consignee reserves the right to store the Managed Inventory at other Consignee facilities or at a third party warehouse location, provided that it advises Vendor of where the Managed Inventory is located and that it bears all costs associated with relocating the Managed Inventory to the other Consignee facilities.
The next part of the contract will address Continue reading »
Topics: Contract Templates |
There are many types of arrangements aka vendor contracts you can enter into with your suppliers. If you are looking at employing a partnership philosophy, one to consider is Consignment Buying. What is consignment buying or vendor owned inventory? A definition of vendor owned inventory or vendor managed inventory (VMI) is when a supplier (the company you purchase from) maintains an inventory bank in the buyer’s facility which is under the buyer’s control. The buyer assumes responsibility for perpetual activity or accounting for withdrawals or usage of stock from the consignment inventory, payment for quantities used and notification to the supplier of the need to replenish inventory. Verification of quantities remaining in inventory is jointly done at periodic intervals.
This strategy has advantages for both the supplier and buyer. The buyer benefits by having reduced inventory investment which can free up funds for capital or other investments and the supplier is assured supply or captive volume. This type of partnership arrangement is often used in the distribution industry.
Some of the other benefits the buyer gains is it removes or eliminates the risk of obsolescence. Obsolescence is often overlooked and it is when the inventory no longer meets your requirements and therefore is returned or sold as surplus. Under a consignment arrangement, the Vendor still owns it therefore they assume the risk.
There is a cost associated with tying your vendor into a consignment arrangement. You can be assured that you will be paying more for your inventory vs a spot buy for the same goods but as a business owner you have to weigh the pros and cons and make your decision based on your existing financial and staffing requirements. For some, the opportunity of using your capital elsewhere, eliminating dealing with obsolete stock, managing the inventory surpasses the extra cost incurred or paid for inventory.
What should a consignment contract look like? What should be included? Stay tuned or subscribe to our feed as the next post will answer these questions and provide further insight on sample consignment or vendor managed inventory agreements.
RFQ for Telecommunications:
RFQPro template #24 is a 13 page sample request for quote for Telecommunications. When issuing a RFQ of this nature it is going to be much more technical than the average proposal you would issue. In fact, it is all about the specifications so having a third party expert to consult or provide the technical component should be strongly considered. After meeting with all the parties in your organization they would be able to provide a solution which will meet with all the departments and overall companies needs. Keeping this in mind, this template will provide you with a strong sense of what is needed to issue a quotation for a new telecommunications system.
It provides details on Evaluation Criteria, Bid Instructions, RFQ Addenda details, Warranty verbiage, General Terms and Conditions as well as many other standard terms you would typically use.
For the Technical component there is a sample specification which covers installation, system specifications, system requirements, physical characteristics, cabling, VoIP, performance specifications, basic phone features, call processing, warranty and maintenance so much can be gleaned by using this template to help you kick start the process.
Not all organizations would have in-house expertise available to assist in crafting a RFQ of this nature so stick to your strengths and ask for direction where needed.
Let RFQPro.com help – this RFQ Sample for Telecommunications is included in our Premium Pack (90 plus templates) and in the Mega Pack.
Topics: RFQ - Request for Quotation |
Evolution of the RFQ:
Acronyms are becoming a part of everyday purchasing lingo. Here are just a few we are becoming accustomed to: TCO, RFQ, RFI, RFP, LOU, LOI, ABC, SPC. It does seem like every year there is a new term being introduced into the purchasing arena. For the experienced purchasing agent, the most familiar of the above terms would be the RFQ and it is a document which has evolved and become more complex over the years.
Well TCO is Total Cost of Ownership, SPC is Statistical Process Control and it is used in manufacturing, ABC relates to classification of your inventory and RFQ is a Request for Quote. The good old RFQ which all of us COP’s – Crusty Old Purchasers understand very well as it was the only document utilized in early purchasing. A request for quote has been around the longest and in the old days everything went out or was issued as a request for quotation or quote. It was sometimes called an invitation to quote or invitation to tender and these both are part of the RFQ family.
Then came the RFP which is a request for proposal. This is where the vendor Continue reading »
Topics: RFQ - Request for Quotation |
RFP for LTL Freight Services:
Selecting a freight broker or transportation service provider is one of the most important decisions you will make for your organization.
Why? Because in the event orders are not delivered on-time you will have potentially lost a customer if you are a supplier and if you are a buyer you could be in for production delays which equate into profit loss. Like it or not freight shipping services can make or break your business and they are an integral part of the supply chain.
The Bureau of Transportation Statistics in the USA reported that the trucking and transportation market on a typical business day ships approximately 43 million tons of merchandise, valued at about $29 billion, moved almost 12 billion ton-miles on the nation’s interconnected transportation network. These statistics imply the significance this industry sector has in regards to transporting our goods. In fact, if it is shutdown for any period it can cripple a country and your business.
Designing a request for proposal for Less than Truckload (LTL) services might include some of the following details: Continue reading »
Topics: RFP - Request for Proposal |
There are many types of vendor contracts a purchasing manager will encounter in their day to day tasks. Service, consultant, supply, inventory, blanket order, equipment, standing order contracts just to name a few. All are different and each one is unique in respect to what you are trying to accomplish.
Service Contract – This vendor agreement might be used for a contract employee providing a specialized service to your organization. The focus of the service agreement would likely be the hours of work, hourly rate and actual service areas this individual would be responsible for. Continue reading »
Vendor Evaluation Tools:
All proficient Buyers know the value, benefits and importance of evaluating your Vendors. They also understand there are not enough hours in the day to complete this task. One of our objectives is to provide tools to make it easier for Buyers to evaluate their suppliers.
Some of the benefits your company will gain from completing regular vendor performance reviews are:
Topics: Reports |
RFQ and RFP Template Packs:
Most of our regular readers are aware the Template Packs you see in the left margin have been subsidized by the company in order to encourage our viewers to subscribe to the release of our newly launched RFQ Software. If you are contemplating purchasing a template pack please take advantage of the present price.
Do not let the low price fool you, these templates are first rate and are covered by our 100% satisfaction guarantee. Where else can you purchase 90 edit friendly templates with RFQ’s, RFP’s, Contract, Policy samples and much more for under $100.00? … our best selling Packs are $37.00 and work out to about .40 cents a template.
Topics: All Templates |
Tender Response How To:
Tendering skills are a critical component of the professional buyer’s job description, however, responding to a tender or RFQ is vital to the success of any business. If you fail to succeed on getting the award on your tender responses it is likely you will not be in business very long. What is the key to increasing your chances at winning more tenders?
Preparation is the key element if corporations and individuals are to expect success from the tendering process.
While some of this preparation we are referring to may demand a capital investment if your representative is to perform a site visit or take part in additional training however, not all preparation is costly. Continue reading »
Free Template Pack:
Our FREE template pack contains a cross section of documentation: RFQ1 – Request for Quotation Template, RFQ2 – Invitation to Bid Letter, RFQ4 – Service Contract, RFQ19 – Basic RFQ, RFQ33 – FOB Terms Defined, RFQ58 – Short Form RFP, RFQ60 – Statutory Declaration.
Immediately after subscribing, you will receive the FREE template pack via e-mail as a .zip file. Please add email@example.com to your safe senders list.Privacy:We hate SPAM as much as you do!
If you are looking for a more robust RFQ, we recommend you consider the Premium Pack which includes: RFQ2 – Invitation to Bid Letter, RFQ15 – Instruction to Bidders (3 pages) and RFQ16 – Form of Agreement, Terms and Conditions (8 pages)…use them together. Continue reading »
Topics: Free Templates |