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Global agreements allow buying organizations to negotiate pricing and define agreements on behalf of a shared central environment. This is in contrast to a regular blanket purchase agreement which can exist only within the realm of a single operating unit. Execution against global agreements can be performed by multiple local operating units. Global agreements:
leverage buying power of all organizations within a company by negotiating and managing global discounts on pricing.
provide a standardized set of goods and services across a company.
achieve timely and accurate reporting information on agreement usage, supplier performance, and item utilization.
standardization on global terms and conditions with each supplier with optional flexibility to override at the local level.
Defining Agreement Scope
Sourcing professionals can negotiate prices on behalf of multiple organizations within an enterprise and then enable the resulting agreement ( prices + terms and conditions) to be shared by those organizations for procuring products and services. Although the agreement is meant for usage in multiple organizations, the agreement unambiguously identifies the parties between whom the agreement was originally crafted. This includes the negotiating organization in the deploying enterprise and the supplier/supplier site combination which represents the selling party
Managing the agreement
Although the agreement can be used by multiple organizations, all control and maintenance responsibilities remain within the organization that originally negotiated the agreement, this includes:
canceling lines
freezing the agreement
putting the agreement on hold
closing the agreement.
The negotiating organization of the agreement should own sole responsibility for approval of the agreement, and the agreement follows the approval policy for this organization. All approval submission checks applicable for the blanket purchase agreement are in effect for the global agreement as well.
Agreement Usage
Like blanket purchase agreements, global agreements have effective start and end dates, total release amount, and agreement currency. There are certain terms and conditions which apply globally regardless of where a release is being performed. These include such terms as FOB terms, freight terms, and attachments. But there are also terms which will depend on the organization performing a release against the agreement such as bill-to address.