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Supplier Managed Inventory Agreement

Supplier Managed Inventory Agreement Template for Indonesia

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Key Requirements PROMPT example:

Supplier Managed Inventory Agreement

"I need a Supplier Managed Inventory Agreement for our pharmaceutical distribution business in Indonesia, with robust temperature monitoring requirements and integration with our digital inventory tracking system, planned to commence from March 2025."

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Document background
This Supplier Managed Inventory Agreement is designed for use in commercial relationships where a supplier takes responsibility for managing inventory at a customer's location within Indonesia. The document is essential when businesses seek to optimize their supply chain operations by transferring inventory management responsibilities to their suppliers, particularly in industries with complex stock management requirements. It incorporates provisions compliant with Indonesian commercial law, including the Civil Code and Trade Law No. 7 of 2014, while addressing practical operational requirements such as stock levels, replenishment triggers, and performance metrics. The agreement is especially relevant for businesses looking to reduce inventory carrying costs, improve supply chain efficiency, and ensure consistent stock availability while maintaining regulatory compliance in Indonesia.
Suggested Sections

1. Parties: Identification of the supplier and customer, including full legal names and registered addresses

2. Background: Context of the agreement, including the customer's inventory management needs and supplier's capabilities

3. Definitions: Detailed definitions of key terms used throughout the agreement, including technical and operational terminology

4. Scope of Services: Detailed description of the inventory management services to be provided by the supplier

5. Supplier Responsibilities: Comprehensive outline of supplier's obligations including inventory monitoring, replenishment, and maintenance

6. Customer Responsibilities: Customer's obligations including access provision, information sharing, and facility requirements

7. Inventory Requirements: Specifications for minimum/maximum inventory levels, storage conditions, and product handling

8. Operating Procedures: Day-to-day operational procedures including ordering, delivery, stock counts, and reporting

9. Title and Risk: Provisions regarding ownership of inventory and risk allocation between parties

10. Performance Metrics: Key Performance Indicators (KPIs) and service level requirements

11. Pricing and Payment: Payment terms, pricing structure, and invoicing procedures

12. Term and Termination: Duration of agreement and termination provisions

13. Liability and Indemnification: Allocation of risks and responsibilities for losses or damages

14. Confidentiality: Protection of confidential information and trade secrets

15. General Provisions: Standard legal provisions including governing law, dispute resolution, and entire agreement

Optional Sections

1. Insurance Requirements: Detailed insurance obligations - include when high-value inventory or specific risks need coverage

2. Technology Integration: Specifications for integration of inventory management systems - include when electronic systems are used

3. Business Continuity: Disaster recovery and business continuity procedures - include for critical supply relationships

4. Environmental Compliance: Environmental requirements and sustainability measures - include when handling regulated or hazardous materials

5. Training and Support: Training requirements and ongoing support provisions - include when complex systems or procedures are involved

6. Audit Rights: Detailed audit provisions - include when regulatory compliance or specific industry standards must be met

7. Exit Management: Detailed transition procedures - include when complex handover may be required at termination

Suggested Schedules

1. Schedule 1 - Product Specifications: Detailed specifications of products to be maintained in inventory

2. Schedule 2 - Service Level Agreement: Detailed KPIs, performance metrics, and measurement methodologies

3. Schedule 3 - Pricing Schedule: Detailed pricing structure, including any volume-based pricing or special charges

4. Schedule 4 - Operating Procedures Manual: Detailed operational procedures and processes

5. Schedule 5 - Facility Requirements: Specifications for storage facilities and equipment requirements

6. Schedule 6 - Reporting Requirements: Templates and specifications for required reports and reporting frequencies

7. Schedule 7 - Contact Details: Key personnel and escalation procedures

8. Appendix A - Insurance Requirements: Detailed insurance coverage requirements and minimum levels

9. Appendix B - System Integration Specifications: Technical specifications for system integration and data exchange

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Laws
Business Day
Confidential Information
Consignment Stock
Customer
Customer Location
Delivery Point
Effective Date
Force Majeure Event
Goods
Initial Term
Intellectual Property Rights
Inventory
Inventory Management Services
Inventory Management System
Key Performance Indicators
Maximum Inventory Level
Minimum Inventory Level
Order
Products
Purchase Order
Reorder Point
Replenishment Lead Time
Safety Stock
Service Levels
Specifications
Storage Area
Supplier
Supplier Personnel
Term
Territory
Title
Usage Data
VMI Services
Warehouse
Working Hours
Clauses
Appointment
Term and Termination
Services Scope
Inventory Management
Stock Levels
Ordering Process
Delivery
Title and Risk
Storage and Warehousing
Quality Control
Performance Standards
Service Levels
Pricing
Payment Terms
Reporting
Audit Rights
Technology and Systems
Personnel
Intellectual Property
Confidentiality
Data Protection
Insurance
Liability
Indemnification
Force Majeure
Change Control
Dispute Resolution
Governing Law
Assignment
Subcontracting
Notices
Entire Agreement
Severability
Waiver
Compliance with Laws
Health and Safety
Environmental Compliance
Business Continuity
Exit Management
Relevant Industries

Manufacturing

Retail

Healthcare and Pharmaceuticals

Automotive

Electronics

Fast-Moving Consumer Goods (FMCG)

Industrial Equipment

Chemical and Raw Materials

Food and Beverage

Construction Materials

Aerospace and Defense

Relevant Teams

Supply Chain

Procurement

Operations

Legal

Finance

Logistics

Warehouse Operations

Commercial

Risk Management

Vendor Management

Quality Assurance

Relevant Roles

Supply Chain Manager

Procurement Director

Operations Manager

Inventory Control Manager

Commercial Director

Legal Counsel

Chief Operating Officer

Logistics Manager

Warehouse Manager

Contract Manager

Category Manager

Supply Chain Director

Chief Financial Officer

Purchasing Manager

Vendor Relations Manager

Industries
Indonesian Civil Code (Kitab Undang-undang Hukum Perdata): Provides the fundamental principles of contract law, including formation, validity, performance, and termination of contracts. Articles 1233-1456 specifically deal with contracts and obligations.
Law No. 7 of 2014 on Trade (Undang-Undang Perdagangan): Governs trading activities in Indonesia, including domestic trade, warehousing, distribution, and supply chain management.
Government Regulation No. 29 of 2021 on Trade Business Implementation: Provides detailed regulations on trading business activities, including inventory management, distribution, and warehousing requirements.
Law No. 8 of 1999 on Consumer Protection: Regulates consumer rights and business obligations, including product quality, safety standards, and liability for defective products in the supply chain.
Minister of Trade Regulation No. 22 of 2016 on General Provisions on Distribution of Goods: Specific regulations regarding the distribution of goods, including inventory management and supply chain requirements.
Law No. 11 of 2008 on Electronic Information and Transactions (if electronic inventory management systems are used): Governs electronic transactions and systems, relevant for digital inventory management and electronic documentation.
Minister of Trade Regulation No. 29 of 2017 on Guidelines for Warehousing: Provides specific requirements and standards for warehousing operations and inventory storage in Indonesia.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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