Eight Percent decrease in Earnings due to contract lapse?

March 29th, 2012

Is your organization heavily reliant on a large supplier, or supplier that will greatly impact the overall financial health?

Today’s post is by Danielle Begley, Account Manager at SafeSourcing.

In a recent article in the New York Times, Walgreen’s has reported an eight percent decrease in earnings in the second quarter due predominantly to the discontinued relationship with Express Pharmacy network.  After failed attempts at contract negotiation, the two companies let the contract expire resulting in a 7 cent loss per share for Walgreen’s.  As the largest pharmacy, Walgreen’s blames a combination of the expired contract and a mild cold and flu season for the decrease in earnings.

Is your organization heavily reliant on a large supplier, or supplier that will greatly impact the overall financial health like Walgreen’s and Express Pharmacy?  If so, you could benefit with the use of a contract management tool, such as that of SafeSourcing.  Using such a system allows for planning through notifications of impending contract expirations.  In addition to expirations, contract management tools offer a much more efficient way to manage current and future contracts while allowing the ability to receive notifications on potential e-sourcing events that should be re-run based on contract expiration.

Mother Nature and the economy are two factors that cannot be easily managed or forecasted however don’t let your organization’s financial health be damaged by a contract lapse.

For more information on contract management please contact a SafeSourcing  Customer Service Representative for more information.

We look forward to and appreciate your comments.

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