A contract is considered to have delivered when it meets or exceeds buyer expectations, fostering trust and accountability, Chief Executive Officer, Leagile, Arogundade Oluwasegun said.

In a recent media engagement, he emphasised the importance of developing clear and exhaustive key performance indicators (KPIs) in collaboration with stakeholders, including regulatory bodies and service providers. Procurement leaders should integrate measurable performance benchmarks to align contracts with business goals and supplier capabilities. For instance, a quality diesel supply contract should specify parameters like sulfur percentage, specific gravity, color, and flash point amongst other critical specification that defines ‘good quality’, while ensuring compliance with regulators standard.

“These criteria must be Specific, Measurable, Attainable, Relevant, and Time-bound (SMART), making it easier to track compliance and mitigate risks,” he explained.

Oluwasegun highlights common procurement challenges, including the tendency to focus on local conditions without considering global economic trends. He noted that factors like U.S., Canada, and China tariff policies and U.K. migration policies can impact lead times, pricing, and talent availability.

He advised procurement leaders to be actively involved in contract development rather than relying solely on legal teams. Understanding how specific clauses affect supplier relationships is crucial for effective contract management.

“Creating a comprehensive specification document with key stakeholders before the contract phase can prevent misunderstandings,” he stated.

Regular contract monitoring is essential to identifying and resolving issues early, protecting business interests, and maintaining trust in the supply chain. Technology also plays a critical role in contract management, providing procurement teams with global insights to mitigate litigation risks.

“Today, leading consulting firms offer robust online knowledge bases that help legal and procurement teams enhance efficiency,” he added.

Oluwasegun urged procurement leaders to prioritise ethical and sustainable practices over short-term cost savings. “We champion best practices that foster win-win outcomes, ensuring long-term profitability and stability,” he emphasized.

Balancing cost-effectiveness, quality, and compliance requires a strategic approach. He recommends pre-qualifying suppliers based on expertise and track record while collaborating with regulatory bodies to align contracts with ethical standards.

By embedding ethical and regulatory considerations into procurement contracts, businesses can establish a foundation for long-term success.

Oluwasegun believes Nigerian businesses must take a proactive and strategic approach to procurement. His insights underscore the need for robust contract management to ensure sustainable and successful supply chain operations.