Contract management

Circular entrepreneurship is impossible alone. Applying circularity within your organisation is often only possible through chain cooperation. Within a chain cooperation, you work together with various parties, for example to close a cycle.

Open dialogue

But what should you do if multiple parties, which normally do not work together, take joint action to contribute to your sustainable ambitions?

Everything starts with an open dialogue, by bringing all your partners to the table and sharing your ambitions. Let them think about what they can and want to do to help realise this. Record the agreements clearly and transparently in a framework agreement to actively steer them in this direction.

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Make use of a cycle agreement

Cycle cooperation is explained on the basis of a practical example. Suppose you no longer want to dispose of cardboard coffee cups as residual waste, but want to use them as a raw material for hygienic paper. Your waste service provider is an important factor in the creation of this cycle. The waste collection may have to be organised differently, and your waste partner will have to ensure that the used cups are taken to the toilet hygiene manufacturer in clean bales. Your service and distribution partner has an important role to play as well, ensuring that the toilet and towel paper it is made out of makes its way back to you.

As you may already have noticed, all these parties need each other, which means that mutual agreements will need to be made with each other in order to create the cycle. The buyer has a role to play in this. In his or her role, he or she is in contact with all parties - it is their task, possibly together with the contract manager, to ensure that the necessary agreements are both made and complied with.

Who is responsible for the agreements made?

Responsibility for compliance with the agreements made differs between organisations. In the case of a cycle cooperation, the facility manager, buyer and contract manager are often involved.

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Facility management mainly has a policy role, rather than day-to-day control.

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The contract manager is responsible for managing the contracts, and focuses actively on this.

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The purchaser is responsible for supervising the tendering process. As part of his/her role, the agreements with all parties involved are also made in consultation with the facility manager.

In almost all cases the agreements can be made within the existing contracts. Contracts will sometimes need to be tweaked. If a waste service provider who currently collects one single waste stream suddenly starts collecting coffee cups separately, the contract will need to be adjusted. The overall agreement can remain in place and you will only need to adjust a few KPIs.

Making agreements

In order to ensure that the underlying parties in the cycle cooperation comply with the agreements, a closed loop agreement is generally drawn up. This is a framework agreement that takes precedence over the other agreements. This only refers to the underlying contracts. But what about pitfalls? Of course, you remain dependent on the willingness of your partners. Our experience shows that this is rarely an issue, because the parties generally want it, in which case an agreement helps to draft and adhere to the guidelines.