Sales Agreements @ A Global Manufacturing Business
The CEO of a global manufacturing business was growing concerned about his company’s sales practices. What had originated as a single facility in the MENA region had, over decades, grown into a company with manufacturing facilities in 11 countries and sales to clients in 83. However, while the company’s leadership had focused on expansion of production capacity and sales, it had not yet developed the systems necessary to effectively streamline and manage internal processes throughout the regions. The most concerning of these was a system to centralize sales contracts, which varied from region to region. Multinational clients voiced concerns over receiving vastly different sales terms from region to region, and their concerns reached the attention of the global CEO. Titan Grey was hired to assist the business in developing a system to manage sales contracts across the business’s various regions.
How could a multinational business deliver consistent sales terms in contracts for the sale of its goods in a variety of international contexts?
We began by interviewing the leaders of each of the company’s sales teams. We learned that issues arose not only because of variances in contracts based on where the goods were being sold from, but also based on the differences of law and custom in the countries of the clients being sold to. The problem, to us, was one of permutation. Simply put, every contract provision could be defined in one of three ways: 1) seller location-driven; 2) buyer location-driven; or 3) internationally standard.
We socialized with our client the necessity of involving a law firm with experience in drafting international sales agreements. With our client’s consent, we worked with lawyers to develop an inventory of legally sound contractual provisions and the specific set of circumstances in which each would be used. We compiled the terms into a customized database leveraging our client’s existing IT resources.
We then socialized with our client the need for the creation of a group at the headquarters level to govern contractions across all regions. We assisted our client’s human resources leaders by providing information on key qualifications successful candidates would have for the envisioned roles, as well as a key responsibilities set for the entire group.
We drafted policies and procedures for the group’s use of the database, leveraging the key toggle points among the various pre-loaded contractual provisions, and escalation procedures for the use of outside counsel should a particular contract require bespoke provisions to be created.
We continued to work with our client’s various stakeholders through the establishment of the new contracts management group and deployment of the contracts database within it. We adapted the system based on real-time feedback until our client’s new division was successfully meeting the needs of its internal clients, the company’s global sales force. What resulted was a system which both protected the interests of the global business across its various regions, while enhancing customer trust and satisfaction by empowering our client to offer a “single-firm” experience across the board.