Wise Agreement

TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
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A wise agreement is a written agreement or group of agreements outlining the terms and conditions of a transaction, project, or agreement. In business, wise agreements are generally written agreements that cover various aspects of production, manufacturing, distribution, finance, and accounting. These types of written agreements are known as production contracts. The term "production" encompasses a wide spectrum of activities, from the production of a product to its sale; smart agreements are those written agreements that outline how those different activities will affect the cost, time, and resources of production and sales.

When a company begins a new production or manufacturing operation, it must engage in production planning. Production planning is a strategic document that helps to determine what resources a company will need for the production of a specific product or for the manufacture of a specific product. The first activity in production planning is "estimating" the amount of production necessary to achieve the product goals. Once production has begun, a company must engage in procurement. Procurement is the process of obtaining goods and services from other companies in exchange for "stocking" inventory, preparing the raw materials and equipment for production, and" packing" the inventory for shipment to the customer.

The warehousing side of production facilities management is the coordination and management of the warehousing assets owned by a company to ensure that all of the company's production facilities are in good operating condition. Most warehousing functions include the transportation of finished goods from the manufacturer, parts manufacturers, and the factory itself to the customer. Many warehousing agreements outline the responsibilities and duties of the warehousing companies and the customer. To facilitate smooth workflow, most warehousing agreements include provisions addressing issues that may arise between the warehousing company and the customer.

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