This Supplier Managed Inventory Agreement is designed for use in commercial relationships where a supplier takes responsibility for managing inventory at a customer's location within Indonesia. The document is essential when businesses seek to optimize their supply chain operations by transferring inventory management responsibilities to their suppliers, particularly in industries with complex stock management requirements. It incorporates provisions compliant with Indonesian commercial law, including the Civil Code and Trade Law No. 7 of 2014, while addressing practical operational requirements such as stock levels, replenishment triggers, and performance metrics. The agreement is especially relevant for businesses looking to reduce inventory carrying costs, improve supply chain efficiency, and ensure consistent stock availability while maintaining regulatory compliance in Indonesia.
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1. Parties: Identification of the supplier and customer, including full legal names and registered addresses
2. Background: Context of the agreement, including the customer's inventory management needs and supplier's capabilities
3. Definitions: Detailed definitions of key terms used throughout the agreement, including technical and operational terminology
4. Scope of Services: Detailed description of the inventory management services to be provided by the supplier
5. Supplier Responsibilities: Comprehensive outline of supplier's obligations including inventory monitoring, replenishment, and maintenance
6. Customer Responsibilities: Customer's obligations including access provision, information sharing, and facility requirements
7. Inventory Requirements: Specifications for minimum/maximum inventory levels, storage conditions, and product handling
8. Operating Procedures: Day-to-day operational procedures including ordering, delivery, stock counts, and reporting
9. Title and Risk: Provisions regarding ownership of inventory and risk allocation between parties
10. Performance Metrics: Key Performance Indicators (KPIs) and service level requirements
11. Pricing and Payment: Payment terms, pricing structure, and invoicing procedures
12. Term and Termination: Duration of agreement and termination provisions
13. Liability and Indemnification: Allocation of risks and responsibilities for losses or damages
14. Confidentiality: Protection of confidential information and trade secrets
15. General Provisions: Standard legal provisions including governing law, dispute resolution, and entire agreement
1. Insurance Requirements: Detailed insurance obligations - include when high-value inventory or specific risks need coverage
2. Technology Integration: Specifications for integration of inventory management systems - include when electronic systems are used
3. Business Continuity: Disaster recovery and business continuity procedures - include for critical supply relationships
4. Environmental Compliance: Environmental requirements and sustainability measures - include when handling regulated or hazardous materials
5. Training and Support: Training requirements and ongoing support provisions - include when complex systems or procedures are involved
6. Audit Rights: Detailed audit provisions - include when regulatory compliance or specific industry standards must be met
7. Exit Management: Detailed transition procedures - include when complex handover may be required at termination
1. Schedule 1 - Product Specifications: Detailed specifications of products to be maintained in inventory
2. Schedule 2 - Service Level Agreement: Detailed KPIs, performance metrics, and measurement methodologies
3. Schedule 3 - Pricing Schedule: Detailed pricing structure, including any volume-based pricing or special charges
4. Schedule 4 - Operating Procedures Manual: Detailed operational procedures and processes
5. Schedule 5 - Facility Requirements: Specifications for storage facilities and equipment requirements
6. Schedule 6 - Reporting Requirements: Templates and specifications for required reports and reporting frequencies
7. Schedule 7 - Contact Details: Key personnel and escalation procedures
8. Appendix A - Insurance Requirements: Detailed insurance coverage requirements and minimum levels
9. Appendix B - System Integration Specifications: Technical specifications for system integration and data exchange
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