This gives suppliers the ability to manage to quantified contract management requirements and often gain significant cost advantages as well. Being able to take advantage of more financially beneficial payment terms, in addition to coordinating on pricing changes with minimal interruption to shared risk and costs can be attained when a CLM-based strategy is in place within an organization. When contracts are the most critical is when there is a high degree of variably present in a supply chain as is the case with mass customization and Build-To-Order (BTO) (Smirnov, Shilov, Kashevnik, 2009). Conclusion

Contracts are seen by many as a necessary evil that only make companies less competitive as they get bogged down in their terms and conditions. Instead through the management of contracts to the clause level (Rosenberg, 2007) companies need to see contract management as a means to gain greater levels of quality assurance and financial stability into their companies (Chao, Iravani, Savaskan,...

The use of the CLM model as the basis for managing enterprises enterprise-wise is gaining in use as suppliers and buyers both look to minimize risk from high inventory levels (Yao, Dong, Dresner, 2010).
References

Chao, G., Iravani, S., & Savaskan, R. (2009). Quality Improvement Incentives and Product Recall Cost Sharing Contracts. Management Science, 55(7), 1122-1138.

Coltman, T., Bru, K., Perm-Ajchariyawong, N., Devinney, T., & Benito, G.. (2009). Supply chain contract evolution. European Management Journal, 27(6), 388.

Robert Rosenberg. (2007). Know Your Clauses. Treasury & Risk,21.

Smirnov, A., Shilov, N., & Kashevnik, A.. (2009). BTO supply chain configuration via agent-based negotiation. International Journal of Manufacturing Technology and Management, 17(1/2), 166.

Yao, Y., Dong, Y., & Dresner, M.. (2010). Managing supply chain backorders under vendor managed inventory: An incentive…