The contract review is a key step in any order fulfilment process. Peforming it quickly and effectively can make a massive difference to your OTIF performance. For those of you unfamiliar with the term OTIF, it stands for On Time In Full.
This article is for those of you that find that the time your contract review takes is too long. Speeding up the process of receiving an order to getting it into ‘production’ is our focus here.
The contract review stage
When I say contract review I am not only talking about the review of the contract itself. I am talking about the associated tasks:
- Do we have the resources available to deliver this work?
- Are our suppliers lined up to deliver their products?
- Can our technologies handle this project?
- Is our capacity great enough to handle the work?
- Will our systems ensure safety and quality for this contract?
Depending on the sector you work in there will be specifics that you need to check off. I’m sure that you know what they are.
What happens when the lead time is too long?
What’s the motivation to improve the contract review process? You might have a list of benefits already in your mind. There are two key issues that crop up time and time again when I consult with businesses:
- You eat into the delivery window. In short, you put the production / service / construction teams on the back foot from day one. Some businesses will cut corners to get the contract started. This often leads to avoidable problems later on in the contract’s delivery.
- You create delays later on during delivery. Some tasks in the contract review you need to jump on right away. Anything that involves a lead time from an external business needs to be on this list. I’m referring to the placing of orders for design, materials, components or equipment. Failures here can result in notable delays later on.
Most companies have a good reason to ensure their contract review process is slick!
There are some quick and easy ways to improve your contract review process. Here are a few of them:
- Ensure your process is formal. If you don’t have a written procedure for your contract review then get it written down! Don’t rely on your team to remember everything. Even better, if you can automate the workflow do it.
- Make the lead time visible. If your team don’t know how long it is taking to complete the process change it. Most businesses that I have worked with were oblivious to their performance. This can be a brilliant KPI if you are struggling.
- Make the status visible. If you can identify which steps in your review process are getting stuck do it. Helping your colleagues out with bottlenecks and technical issues is part of team work.
- Create a sense of urgency. Linked to the performance issue, set a target for your contract review. Don’t worry if some are more complicated than others. Set a target to keep your team focused and support the contracts that are struggling. Talk about contract review performance with your team often.
- Identify the slow process steps. Do some quick analysis and figure out which parts of the contract review are slow. Or, tedious. Or, ineffective. Plan to improve or drop them.
- Shelf life for decisions. If certain parts of your process get jammed waiting for decisions then consider a ‘shelf life’. When you reach the shelf life date, flush it. Make the decision, or delegate it to someone with time. Keep the focus on flow within the contract review.
- Focus on front loading tasks. It is tempting to think that you have plenty of time at the start of a process. Don’t get sucked into this as other tasks and diversions will appear! Complete the contract review tasks as soon as you physically can and watch the process flow.
Nibble your way through the changes
After reading the list above you may have many improvements that you wish to undertake. If you are feeling overwhelmed then take the time to nibble your way through your tasks.
Use the Kaizen approach and make your life easier. Break the tasks down into smaller steps and watch the progress unfold infront of you. Tackling a massive project when you are already feeling overloaded doesn’t feel great. It often leads to procrastination rather than results.
I hope that you find some opportunities to improve the flow of your contract review process. Completing this on time is a great strategy to improve your overall OTIF performance.