Managed Services
Managed Agency Supply
A derivative of master vendor agreements
which allow the client to closely monitor
the effectiveness of the supplier base through
the management information and KPIs reported
by the managing agency.
The managed agency structure normally includes
a first and second tier of suppliers who
are managed to ensure that the client is
guaranteed a 100% supply fulfilment. A client
would normally be involved in the selection
and review of second tier suppliers. The
managing agency and their group companies
would normally supply first tier supply
and thereby ensure a preferential opportunity
to fill most requirements.
This structure offers added value to the
client and can effectively reduce the client's
risk in dealing with one supplier.
The cost of providing a managed service
can either be recovered via a management
fee, or as a higher percentage of second
tier mark-ups or where the volume to be
sourced by the managing agency is high enough,
from the managing agency mark-up.