Agreement Nomenclature

We do not use Contract management. We use the vendor number, the type of contract that it is and for a few items we have more detail.

For instance, for our main distributor, we have 23592-Q (quote) and 23592-C NEW CONTRACT for the items that were firmly on a contract contract. We have one that is 1426-Q Depuy Orthopedics to differentiate it from the other 1426 items (Johnson and Johnson in our system). We use PO28 quite a bit to see what agreements an item is active on.

Michelle

We do not have Contract Management either. For the most part our naming convention is:

• 2-3 characters for the manufacturer (e.g. BEC for Beckman Coulter, COD for Codman, CAR for Cardinal, 3M for 3M).
• 3 characters to describe which affiliates participate in the contract (e.g. MMH for our entire health system, MID for the medical center in Midland); although this is obsolete because we've pushed hard so that our contracts cover all affiliates, not just one or just the medical centers.
• 3 characters to describe whether the contract is local or GPO administered (e.g. LOC for local, PRE for Premier, CHA for Champs).
• The contract number.
• The tier (if tier pricing available)
• e.g. COD MMH LOC COD0001- local contract for Codman; 3M MMH AME VH10087 T1- Amerinet contract for 3M at tier 1.

Thanks for your feedback!

It seems like we would have an excessive amount of agreements out there if we added them for each contract.  Is this difficult for you to manage at the manufacturer and contract level? 

Thanks again!

Hi Stephanie,
One more food for thought... I’ve been at two different hospitals and it’s been handled two entirely different ways. Some similarly mentioned in the thread.
The first kept it very simple. They would title it with the vendor name and a general description. This was very helpful when you needed to add an item and/or find the contract quickly. A big bonus if you are using MSCM. The other benefit was very low maintenance. They did break out a contract if they felt it needed it to stay on its own, like implants. One con was some very long PO25 files.
My new place is far more in depth. We break them down by GPO(Or Local)- Category- Contract Number- Tier-Vendor #. Looks something like this WP-OR-680-T5-2090. This requires a lot of upkeep and slows down the process significantly when bringing in new items or searching. We also place the item on multiple contracts which can make it even more difficult to search. The biggest thing is the required maintenance/upkeep is almost a full time job using this method.
I would say of the two, it all depends on available staff. Number one can be managed by Buyers/MMIS the second really almost requires its own admin. We almost always use C.

Thanks Leo! 

I was thinking a healthy mix of the two by grouping the contracts.  For example:  For one vendor we could have some items on a local contract, some on a premier contract, some on a specific lab contract, and others just at vendor cost.  Here I would have 4 agreements (3 of which would be "C" type and the vendor cost as a "T" type.  I can't take credit for this idea, Kat shared this with me!  We keep our contract detail in the userfields of PO13 (this isn't always the best either), but I'm thinking this might be better suited for an agreement attribute or agreement userfield instead.

To your point if the full contract number is used as the agreement, which is what I believe it may end up having to be when we move to Contract Management it will absolutely need it's own full time administrator to manage the details.  When trying to capture the amount of contracts for our distributor I was overwhelmed!   

I'm pretty sure that we don't add an agreement in Lawson for every GPO contract we have, local contracts sure. We have about 600 active agreements in PO25 right now. Over 90% of 85K+ active items in our item master are tied to an agreement. We have a contract management team of 4 people- a contract manager, an analyst, a data specialist (manages the item master in Lawson and Cerner), and a data entry clerk.

We also use the agreement user fields to identify the VAT a contract belongs to.

When setting up agreements, what exactly is the difference between Contracts (C) and Catalog/Quote (T) types?
I'm trying to decide on which one I need.

Jeremy,

We define it as: a Contract (C) is firm. The price should not change beyond the percentage allowed in the contract itself. Premier agreements, local agreements, etc would fall on these. A Quote is anything that we don't have a firm contract on. The rep gave us the pricing but it isn't anything that is locked in place.

Hope that helps!
Michelle

Thanks, Michelle.
That sounds a lot like what I was considering:
Contract: This is something where there is an agreement in place and there is no "wiggle" allowed. It has been formalized to state what each item costs.
Catalog/Quote: This is similar to a "catalog" from a store like Staples. Here is our goods and the price for each. Prices subject to change.

Does each type require that every item be in the item master?

Yes I believe so. We don't have Contract Management so every item that is on an agreement has an item number.

Thanks for all the information!

I'm looking at vendor service agreements now. I was hoping to maybe do a standing type agreement for some services that are the same amount every month, but I don't think I can do that since I can't have service type items in the IC11 and each item on a standing agreement has to be in the item master.

Thanks again.

Loading service agreements in PO25 is problematic. We don't do it. We only load supply contracts and we don't load quotes either.

Can you explain what problems you encounter when trying to load service agreements?
This is an option we are currently exploring that could potentially save us a lot of time by getting away from invoices that aren't on some kind of PO/Service Agreement. The coding could be setup so that all the AP clerk has to do is then match the invoice to the service agreement instead of having to do all the coding manually.

Sorry, I don't remember what the exact problem was. It was almost 10 years ago when we looked into it. I just remember it made more sense to just put the service on a PO rather than in PO25.

Ours was a good 8 years ago so I'm a little fuzzy as well. However, I think it was related to the reason we got rid of all of our standing orders. If I remember correctly, you had to release each shipment as a different release number of the PO (12345-1-SO, 12345-2-SO, etc). We figured it would be too difficult to have the vendors keep up with the different release numbers as well as our staff. We actually moved to creating a new PO each year for those that truly needed to continue with a different line for each shipment (it makes it easier to troubleshoot any issues).

I'm not 100% on this since it was awhile ago but that's what comes to mind. We do our service POs as requests through RQC and regular POs. If it is for something that will be paid the same every month for the next year, we created a PO code of PMT. For the other services, we use SVC. If it is a PMT code, it tells accounting the invoice is okay to pay. If it is an SVC code, they have to reach out to the end department to confirm the work was already done. Either way, they are service type purchase orders so they can do a two way match.

Michelle

At my former employeer, we used PO20 for just about everything.

We tried agreements with releases but saw no advantage to it. NIce to have but maintenance was required. (Lawson never tells you about the maintenance required!)

A/P was always concerned if Service was actually recieved, so on  those orders, SVC was used as a PO suffix. When A/P saw the suffix, they looked for an email address in a PO user field. Either the buyer or requester entered the email address. A/P would emial that person and confirm receipt of the Service.

 

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At DuPage, a PO20 is set to encumber funds, so PO20's are only used for one-time deliveries.

We  started using PO25.6 Contracts, but prices seems to change all of time, part numbers changed, and since there was only one person to maintain IC11, PO13, it was decided the effort was not worth it, at this time. (Again, Lawson never tells you about maintenance)

We use PO25.7 Service Agreements for 90% of the ordering. No receiving  required. It is used for Services as well as products. A/P knows if  the products were received or if the servcies were rendered because the user department approves invoices.

 

 

 

Lars- How are products delivered to the departments at DuPage? Direct via carrier?

Common Carrier and vendor owned delivery trucks/vans.

DuPage is new to Lawson and only has one receiver, but that number will be growing as departments begin to accept Lawson.