Wednesday, July 14, 2010

PTDA develops guidelines for contracts

Guidelines will help implement a manufacturer/distributor agreement

The Power Transmission Distributors Association (PTDA) has created a comprehensive distributor/manufacturer agreement template focused on the elements that need to be considered when entering a formal relationship.

The "Guidelines for Developing a Distributor/Manufacturer Agreement: A Components Checklist" is a powerful resource for outlining the parameters of a mutually profitable partnership.

Rex Davis, VP Supply Chain, Warehouse and Aerospace Division, IBT Inc., served as chair of the task force charged with developing the guidelines.

In a press release Davis said: "PTDA is an association of both distributors and manufacturers. We need to work together to deliver solutions to our mutual customers. To do that effectively, we have to be solid in our business relationship and understand what each of our strengths are. We analyzed these guidelines from many different perspectives: small, mid-sized and large companies; distributors and manufacturers; relationships and processes. The input we received from PTDA manufacturer and distributor members throughout the development process influenced the committee to create a usable resource that is relevant to all of our members."

The "Guidelines" include practical, customizable language for 38 contract clauses grouped in several sections including:

Introductory Clauses
Terms and Conditions Clauses
Product and Price Policy Clauses
Sales Policy Clauses
Inventory Clauses Concluding Clauses

Developed using sample agreements from many of PTDA's member companies, each clause includes a description of when the clause may be applicable and provides sample language to use in writing a mutually acceptable contract. Recognizing that manufacturers and distributors must reach their own individual business decisions in determining which components to include and the content of each components of any agreement, the "Guidelines" also include a Word document, allowing you to edit, delete or add to each of the sample clauses.

"Communicating on important issues and laying out the expectations in advance with our distributors make it possible for us to focus our joint efforts on helping the customer," said task force member Dennis Tanrikulu, vice president of aftermarket sales for NTN Bearing Corporation.

"A written agreement that addresses all of those details allows us to spend our time on the activities that drive profitability for both of us. These Guidelines will help both parties ensure that each of the components of an agreement are discussed and negotiated before an issue can arise."

The "Guidelines" are available for purchase at $349 for non-members at As a benefit of membership, PTDA member companies can download the "Guidelines" at no charge.

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