A Smooth Transition
Challenge: Company A had just acquired a large number of suppliers from Company B. Company A must now “take over” the supplier contracts, but has no idea what terms were agreed to and what risk and obligations Company A would be taking on. Company A needed to understand the volume, the risks and exposures, and how large the gaps were related to its own requirements and standards. This was a huge and daunting task that would require a lot of time. Furthermore, the legal and procurement department personnel were already overloaded with their own work.
Solution: After some collaborative discussion with Company A, our personnel formulated a team to step in and handle the transition of the procurement contracts and related documents. A plan was developed and tracked in order to make sure everything was covered in a timely manner. First, after a preliminary understanding of the strategies, policies and procedures of the 2 merging entities, the documents were organized and stored on a secured and encrypted data room. Incorporated into the plan were a review process, gap analysis, business analysis, risk assessment, priorities and disposition options. Templates and approval processes were created with an eye for simplicity and efficiency.
Result: Over 2000 supplier agreements were effectively transitioned to Company A in 9 months. Risks were minimized significantly due to the organized, focused review and analysis and the resulting ability to prioritize and close as many gaps as possible during the transition. Company A personnel were able to participate in the transition but did not need to take time away from their full-time job to do so. Our involvement also gave Company A an end in sight and completion window which allowed the business to move forward quickly without the constant need to revisit transition activities.
Gap-Free Supplier Contracts
Challenge: A multi-national equipment manufacturer and services Company had accumulated numerous suppliers and did not have sufficient contract language to cover rigorous customer requirements, government regulations and its code of conduct leaving them wide open to risk and disputes.
Solution: Our personnel used a methodical and organized strategy as follows: thoroughly reviewed largest and most stringent customer agreements, identified gaps, developed improved supplier templates, established an enhanced vendor management questionnaire, obtained buy-in for new process and implemented change by including key personnel in the development of the new streamlined ways of working. Existing suppliers were brought into compliance through a streamlined contract process.
Result: This project resulted in minimized risk exposure, ability to quickly locate documents and significant margin improvement by avoiding costs associated with slow-turn-around times, fines, disputes and insurance premiums.
Bringing in New Investors
Challenge: Company C, a growing construction company, was at a turning point and poised for growth. This growth prompted changes in ownership and the bringing in of new investors. The problem was that the company was formed 20 years ago, they had changed names multiple times and they had trouble locating the previous ownership information, bylaws and shareholder agreements.
Solution: Our personnel worked with the existing owners and new owners to gain a full understanding of the intent of the parties and also to provide awareness about what was needed for all the documentation to be valid. After some discussion, everyone was on the same page. Our team drafted all the necessary documents, made amendments to exiting documents and generally produced a clean and enforceable set of corporate documents.
Result: Setting up proper corporate agreements and related documents provides protection to the owners from personally liability. Also all the owners were now clear about the ownership structure. Since the details of their ownership were taken care of, they were now able to focus on the business and move forward full steam ahead with their growth plans. Our team is now working on setting up their contract templates and helping them develop a streamlined process for contract review, negotiation and supplier on-boarding. Doing so will reduce their overall risk exposure, limit their liability, reduce their insurance premiums and allow them to make consistent and smart business decisions as a team.