Mondavi Procurement ManagementProcurement is the complete process or action of acquiring or obtaining materials, property, or services at the operational level, such as purchasing, contracting, and directly negotiating with the source of supply. The procurement of goods and services is a broader process than just the price on the wine label; the process of purchasing such items involves important organizational costs, which often represent half the price of the product. Considering the large number of purchases Mondavi makes in a year, it's easy to see how these costs can spiral out of control without careful management. This document will describe the policies, procedures, tools and administrative contract resolution procedure for Robert Mondavi Winery, external influences on the procurement management process, the role of risk management in contract administration and how an effective Procurement management can lead to successful outsourcing by Mondavi. Mondavi Contract Administration Policies and Procedures Contract administration policies and procedures for Mondavi and its suppliers revolve around both parties determining what policies and procedures should be included in the contract. Although the Legal Department generally manages policies and procedures for Mondavi, they are typically negotiated before being turned over to the Legal Department for review. They are included in the final draft contract and may include guidelines for returning the product, how you will be refunded if you return a product, and the process Mondavi follows for accepting the product. The policy and procedures also include the final cost and payment methods. Risk management for Mondavi and the supplier is also included in the policies and procedures. Mondavi Contract Administration Tools Mondavi and the supplier use many different tools in the contract administration process to ensure that the contractual agreement is respected. The Mondavi contract administrator applies the most relevant tools for the supplies to be acquired and for the specific supplier. Just as each project is unique, the contract administration process tool is also a unique check and balance for the current project. A specific example that describes how the tools can be applied to the administrative process is the project of the packaging machine provided by Orion. Mondavi used a buyer performance review to determine whether Orion could provide a packing machine to solve the damaged crate problem. This report contained specific points that Mondavi wanted to review with Orion on their packaging machine. The performance review focused on seeing the machine in action performing the tasks for which it was designed. Using this method, Mondavi determined that Orion's machine still had problems with crates crushing; because Mondavi insisted on this revision process, Orion was able to make the necessary mechanical changes.