Purpose

This workplace activity requires you to manage the daily implementation of a supply chain contract or service-level agreement. You will monitor deliverables, evaluate performance, address service failures, identify potential penalties and initiate the payment-approval process.

Workplace Outcomes

You must be able to:

• Interpret a contract or service-level agreement.
• Identify contractual deliverables and performance criteria.
• Monitor supplier or service-provider performance.
• Evaluate actual performance against agreed requirements.
• Record performance variances and noncompliance.
• Develop a service-recovery plan.
• Identify potential contractual penalties.
• Initiate the payment-approval process.
• Maintain accurate contract-management records.

1. Select the Contract or Service-Level Agreement

Use an active workplace contract or service-level agreement associated with:

• Demand execution
• Transport and distribution
• Warehousing and facilities
• Production
• Procurement and supply

Record:

• Contract reference number
• Contracting parties
• Goods or services covered
• Contract period
• Contract value
• Responsible contract manager
• Supplier or service-provider representative

Use an authorised extract if the complete contract is confidential.

2. Review the Contractual Requirements

Identify and record:

• Required goods or services
• Quantities and quality standards
• Delivery dates and locations
• Prices and payment terms
• Reporting requirements
• Performance measures and targets
• Responsibilities of each party
• Change-control procedures
• Dispute-resolution procedures
• Service-recovery requirements
• Penalty or remedy provisions
• Conditions for approving payment

Clarify uncertain terms with the responsible contract manager before evaluating performance.

3. Prepare a Contract-Monitoring Register

Convert the contractual requirements into measurable monitoring criteria.

Ensure each criterion is directly linked to an approved contractual requirement.

4. Monitor Contract Deliverables

Monitor delivery performance throughout the workplace period.

Check whether:

• Deliverables were completed on time.
• Correct quantities were supplied.
• Goods or services met quality requirements.
• Agreed prices were applied.
• Required documents were submitted.
• Health, safety and compliance requirements were met.
• Problems were reported and resolved within the agreed period.
• Contract changes were properly authorised.

Record actual performance and retain supporting evidence.

5. Calculate Contract Performance

Deliverable Completion Rate

Deliverable completion rate (%) = (Deliverables completed ÷ Deliverables due) × 100

On-Time Delivery Rate

On-time delivery rate (%) = (Deliverables completed on time ÷ Deliverables due) × 100

Compliance Rate

Contract compliance rate (%) = (Compliant deliverables ÷ Deliverables evaluated) × 100

Cost Variance

Cost variance = Actual invoiced amount − Contracted amount

Cost variance (%) = [(Actual invoiced amount − Contracted amount) ÷ Contracted amount] × 100

6. Evaluate Performance

For each deliverable:

1. Record the contractual requirement.
2. Record the actual result.
3. Calculate the variance.
4. Check the supporting evidence.
5. Determine whether the deliverable is compliant.
6. Assess the operational and financial effect.
7. Record the required response.

Consider both satisfactory and unsatisfactory performance.

7. Record Contract Noncompliance

Possible noncompliance includes:

• Late delivery
• Incomplete delivery
• Incorrect quantities
• Poor-quality goods or services
• Unauthorised price changes
• Missing documents
• Failure to meet reporting requirements
• Use of unapproved subcontractors
• Failure to correct a reported problem
• Breach of safety or legal requirements

Classify each case as minor, moderate, major or critical according to its effect and the organisation’s procedures.

8. Notify the Relevant Parties

Report noncompliance through approved channels.

The notification should contain:

• Contract reference
• Affected deliverable
• Contractual requirement
• Actual performance
• Supporting evidence
• Nature and severity of the variance
• Required corrective action
• Response deadline
• Escalation arrangements

Keep a record of the notification and the supplier’s response.

9. Develop a Service-Recovery Plan

Where a service failure has occurred, prepare a recovery plan that states:

Possible recovery actions include:

• Expedite the outstanding delivery.
• Replace defective goods.
• Repeat the service at no additional cost.
• Provide temporary replacement capacity.
• Correct incomplete documentation.
• Increase resources.
• Revise the delivery sequence.
• Implement closer performance monitoring.
• Provide the affected customer with regular updates.

Ensure the recovery plan protects operational continuity and customer requirements.

10. Identify Potential Contract Penalties

Review the contract before recommending a penalty.

Potential remedies may include:

• Service credits
• Payment deductions
• Liquidated damages
• Rejection of goods
• Replacement at the supplier’s cost
• Recovery of additional expenses
• Suspension of work
• Formal breach notification
• Contract termination

Record:

• The relevant contract clause
• The nature of the breach
• Supporting evidence
• The proposed remedy or penalty
• The required approval
• The person responsible for further action

Do not impose a penalty without the required organisational and contractual authority.

11. Verify the Invoice

Compare the supplier’s invoice with:

• The approved purchase order
• Contracted prices
• Goods-received records
• Delivery documentation
• Quality inspection results
• Approved variations
• Service-level performance
• Applicable deductions or credits
• Relevant tax requirements

Record discrepancies and refer them for correction before initiating payment approval.

12. Initiate the Payment-Approval Process

Complete the organisation’s payment documentation and attach the required evidence.

The submission should include:

• Approved purchase order
• Supplier invoice
• Proof of delivery or service completion
• Goods-received note
• Quality or performance confirmation
• Approved contract variations
• Applicable service credits or deductions
• Contract manager’s recommendation

Submit the payment request to the authorised approver. Initiating payment approval does not mean approving a payment outside your delegated authority.

13. Close and Report the Monitoring Period

Prepare a contract-performance report containing:

• Deliverables monitored
• Performance results
• Positive and negative variances
• Contractual noncompliance
• Service-recovery actions
• Potential penalties
• Invoice findings
• Payment-approval status
• Outstanding matters
• Recommendations for the next monitoring period

Workplace Activity

Manage the daily implementation of an active supply chain contract or service-level agreement over the assigned workplace period.

You must:

1. Review the contract and identify its deliverables.
2. Develop a contract-monitoring register.
3. Monitor actual performance.
4. Evaluate deliverables against contractual criteria.
5. Record and communicate noncompliance.
6. Develop and monitor a service-recovery plan.
7. Identify potential contractual penalties.
8. Verify the supplier’s invoice.
9. Initiate the payment-approval process.
10. Compile a contract-performance report.

Required Workplace Evidence

Submit:

• An authorised contract or service-level agreement extract
• Contract-monitoring register
• Performance calculations and evaluation records
• Delivery, quality or service evidence
• Noncompliance records and notifications
• Supplier or service-provider responses
• Service-recovery plan
• Record of potential penalties or remedies
• Invoice-verification checklist
• Payment-approval documentation
• Contract-performance report
• Completed work-experience logbook
• Evidence signed and dated by the workplace supervisor

Confidential information may be removed or anonymised with the supervisor’s approval.

Supervisor Verification Checklist

The supervisor must confirm that the learner:

• Worked with an authentic workplace contract or service-level agreement.
• Correctly identified contractual deliverables.
• Monitored performance using valid evidence.
• Evaluated deliverables against contractual criteria.
• Reported noncompliance through approved channels.
• Developed an appropriate service-recovery plan.
• Correctly identified potential penalties or remedies.
• Verified the invoice against supporting documents.
• Followed the authorised payment-approval process.
• Maintained complete and accurate records.
• Produced evidence reflecting their own workplace performance.

Lesson Summary

You monitored the daily implementation of a supply chain contract or service-level agreement, evaluated deliverables, addressed noncompliance and developed a service-recovery plan. You also identified potential penalties, verified the related invoice and initiated payment approval in accordance with organisational authority. Your completed work-experience record must be verified and signed by the workplace supervisor.