what is system contractingSolutionSystem Contracting is the

what is system contracting

Solution

System Contracting is the development of an agreement with a supplier to purchase items or raw materials in large quantity on a continuous basis. The main purpose is to reduce cost and streamline the procurement process. The contracct period could range from 1to 5 years. Catalog is usually the part of the contract that contains the details of the product.

It usually requires close coordination between buyer and supplier. If done properly, each side can reduce administrative cost substantially. This is sometimes called “Stockless Purchasing”.