■ Contingency planning: hope for the best, plan for the worst. Include clauses that address potential disruptions and outline alternative supply arrangements or notifi cation periods. If you’re off ering any exclusivity or committing to minimum purchase levels, be sure to cover what happens to these if the supply chain gets disrupted.
■ Policies, policies, policies: you to have to ensure that your suppliers are meeting the standards you and your customers expect, both in terms of legal compliance and ethical trading more generally. Don’t take the traditional route of writing a policy for every issue (no-one reads them let alone complies with them). Instead adopt a short, clear Supplier Code of Conduct setting out your minimum expectations for anyone you work with.
Customers ■ Know where you stand: if you’re mainly selling to retailers or major wholesalers, it’s likely that you won’t be able to negotiate legal terms. T is doesn’t mean taking a ‘sign it and see’ approach. You still need to know what you’re committing to, so you can pass on risk and any customer requirements to your suppliers (and meet your own obligations).
■ Be consistent: where you’re selling direct to consumers or to distributors, apply a consistent approach to their contracts. You need clear, reasonable and easy to implement terms for these customers that properly refl ect your brand, legal requirements and internal procedures. Consistency makes these contracts easier to implement, manage and change where you need to.
■ Payment terms: cashfl ow can be a huge challenge for food and drink suppliers. With a range of suppliers to pay, often before you’ve been paid yourself, every day of credit counts.
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As well as careful cashfl ow modelling and tight credit control, make sure your various payment terms align as much as possible to stay out of the red.
■ Delivery and acceptance: customer contracts must clearly defi ne when products need to be delivered and when they’re accepted. Make sure your manufacturers and logistics providers can actu- ally meet any commitments you’re signing up to with customers (sounds obvious but it’s missed a lot!).
■ GSCOP: if you’re selling to the supermarkets, understand your rights and their responsibilities under the Grocery Suppliers’ Code of Practice. GSCOP is designed to ensure you’re treated fairly and gives you protection on issues like promotions, pay- ment terms and de-listing. If you know your rights, you’ll know when they’re not being complied with.
Ready to take control of your supply chain? Don’t let complex contracts become a recipe for disaster. Howes Percival’s Food and Drink team are experts at supporting clients to eff ectively manage their supply chain contracts and would be happy to off er a free benchmarking assessment of your current supply chain contracting.
To fi nd out more, contact Miles Barnes at Howes Percival at
miles.barnes@
howespercival.com or visit
www.howespercival.com
FOOD, DRINK & HOSPITALITY
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