Question

Why are companies like Walmart and GAP developing their own supplier agreements? How does it differentiate them from other companies?

Answer 1

Companies like Wal-Mart and GAAP are developing their own supplier agreements with an objective of exerting company’s control on the supplier side of business as well as making the supplier comply with the business regulations of the company. Using the supplier agreement, the company can exert control on the supplier’s selection, sourcing activity, contract compliance, supplier evaluation and estimation of overall spend.

Companies developing their own supplier agreement have an upper hand on the companies, which do not have dedicated supplier agreement. The reason being that company with supplier agreement can control the supplier side of business and consume the supplier quality as per the business quality of the company.