Supplier Managed Inventory Agreement Template for India

This document is essential for businesses operating in India that wish to implement efficient supply chain management through vendor-managed inventory systems. A Supplier Managed Inventory Agreement is particularly relevant in industries with regular, predictable demand patterns and where stock availability is critical to operations. The agreement, compliant with Indian commercial law, establishes the framework for suppliers to take responsibility for maintaining optimal inventory levels at the buyer's location, typically using advanced inventory monitoring systems. It covers crucial aspects such as inventory ownership, risk transfer, performance metrics, technology requirements, and operational procedures. This type of agreement is increasingly important in modern supply chain management, especially with the growing adoption of digital inventory tracking systems and the need for more efficient stock management solutions in the Indian market.

1. Parties: Identification and details of the supplier and buyer, including registered addresses and company registration numbers

2. Background: Context of the agreement, existing relationship between parties, and purpose of implementing SMI

3. Definitions: Detailed definitions of key terms including Inventory Levels, Order Points, Usage Data, Replenishment Criteria, etc.

4. Scope of Services: Detailed description of the SMI services, including inventory management responsibilities and geographical coverage

5. Inventory Management Obligations: Supplier's responsibilities for monitoring, maintaining, and replenishing inventory

6. Buyer's Obligations: Buyer's responsibilities including providing access, usage data, and maintaining appropriate storage conditions

7. Ownership and Risk: Terms regarding transfer of title, risk of loss, and ownership of inventory

8. Pricing and Payment Terms: Pricing structure, payment terms, invoicing process, and any volume-based discounts

9. Performance Metrics: KPIs, service levels, and measurement criteria for inventory management performance

10. Technology and Systems: Requirements for inventory management systems, integration, and data sharing

11. Term and Termination: Duration of agreement, renewal terms, and termination provisions

12. Confidentiality: Protection of confidential information and trade secrets

13. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification obligations

14. Force Majeure: Provisions for handling circumstances beyond parties' control

15. Governing Law and Dispute Resolution: Choice of law, jurisdiction, and dispute resolution mechanisms