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Strategic Supply Management by Robert Trent

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CONTRACTING FOR THE LONGER TERM

Several years ago a logistics company entered into a five-year agreement that called for a supplier to place people and equipment at each of the buyer’s many sites to perform fleet maintenance. In the second year of the agreement, it became painfully obvious that the supplier was unprepared to ramp up and support a contract of this magnitude. The buyer had to quickly qualify a second service provider, a process that required time and money. While the buyer’s attorney had insisted the agreement contain a termination clause with 30 days’ notice, this did little to help the situation once the supplier was physically ...

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