Service Level Agreements
When I became Purchasing Manager I found that
the service level agreements were uniform, which resulted in high
operational costs, besides there were no standards for the same kind
of service, and besides, these agreements would only be ready and signed at
least 6 months after a service started being provided.
I identified all the services under contract at
the company’s units in Brazil, such as: landscaping, restaurant, security,
cleaning, contracting unskilled labor, etc.
From then on we proceeded to make all
service agreements, regarding the same kind of service level, to have the
same due date. This way we were able to negotiate with suppliers the
possibility of having only one supplier, whenever feasible, carrying out a
certain kind of service level at our several units, which provided the
company a reduction of direct and indirect costs. We standardized
contractual clauses, besides eliminating unnecessary clauses that only resulted
in making the process more expensive.
This type of contracting then became much faster, by
simplifying all agreements, which now had the same due date for similar levels
of service provided throughout Brazil. These agreements were implemented before
the services started being provided, and we were able to achieve savings of
up to US$500,000.