The improvement of contract management processes in the pursuit of higher contract compliance Assessment at Sara Lee International

Within the last decades a fast and popular way for multinationals to improve profit has been the execution of takeovers. The take-over strategy enabled SLI to successfully market many strong brands all over the world and to leverage her purchasing power. In order to distinguish and pursue these leveraging opportunities, SLI centralized her procurement department. The procurement department is taking her responsibility to leverage the purchasing power through the development of framework contracts. Although perfect negotiated contracts with both low prices and high quality seem promising, pitfalls can apply. A contract can only be valuable if it is used by stakeholders in the company: the internal customers. If contracts are not used, the organization can suffer from higher prices and supply risk. The „act‟ of using procurement contracts, „within this report defined as contract compliance‟, is seen by SLI as an important key performance indicator (KPI) of the procurement processes. Assignment SLI is suffering from low contract compliance. It is not completely clear for SLI, to what extent the performance of its contract management relates to the issue. Additionally if a relation does apply, it is unknown which managerial- or technical tools should be applied to improve the contract management performance in order to realize higher contract compliance.