Procurement is the complete process or action of acquiring or obtaining material, property, or services at the operational level, such as purchasing, contracting, and negotiating directly with the source of supply. Procuring goods and services is a larger process than just the label price of wine; the process to buy those items includes major organizational costs, often accounting for half of the product price. When allowing for the vast number of purchases Mondavi makes in a year, it is easy to see how these costs can spiral out of control without careful management.
This paper will describe the contract administration policies, procedures, tools and termination procedure for the Robert Mondavi Winery, external influences on the procurement management process, the role of risk management in contract administration, and how effective procurement management can lead to successful outsourcing by Mondavi.
Mondavi Contract Administration Policies and Procedures
Contract administration policies and procedures for Mondavi and their suppliers revolve around both sides determining what policies and procedures should be included in the contract. Though the legal department generally handles policy and procedures for Mondavi, they are generally negotiated before being turned over for legal to review. They are included in the final draft of the contract and can include guidelines for product return, refund methods due to returning of a product, and the process Mondavi has for accepting the product. The policy and procedures also includes the final cost and methods of payment. Risk management for Mondavi and the supplier is also included in policies and procedures.
Mondavi Contract Administration Tools
Mondavi and the supplier use many different tools in the contract administration process to ensure that the contractual agreement is met. Mondavi's contract administrator applies the tools most relevant to the supplies being acquired,... [continues]
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