There is also a risk that suppliers themselves may struggle to honor long-term contracts if unforeseen events—such as factory shutdowns or regulatory changes—impact their cost structures. In such cases, rigid contracts can lead to strained relationships or supply disruptions.
Finding the Right Balance Between Flexibility and Security
So how can procurement professionals strike the optimal balance between price security and flexibility?
Blend Contract Types: One effective strategy is to use a mix of long-term and short-term contracts. By securing core component
