ContractIntelligenceHub

Setup project

• Make sure poetry is installed, otherwise install with:

  pipx install poetry
  

  If pipx is not installed, install it via https://scoop.sh/

  Ensure Long File Path is enabled on Windows.

• Run poetry install

Run project

Execute poetry run streamlit run coninthub/app.py

env file für den SK

AZURE_OPENAI_ENDPOINT=
AZURE_OPENAI_KEY=
ALPHAVANTAGE_API_KEY=

Example Output

Negotiation Strategy for Contract Renewal with AluminiumY

Summary of Market Situation and Stock Value Analysis

The current stock value of Aluminium has shown some fluctuations over the past year, with the latest value being approximately $2352.47 per metric ton. The market news sentiment for the most relevant companies (Alcoa, Century Aluminum, and Kaiser Aluminum) is generally neutral to somewhat bullish, indicating a stable to slightly positive market outlook for Aluminium.

Strategy

Given the criticality of the supplier (Tier 1 - Business Critical) and the high risk associated with the contract, the negotiation strategy should focus on securing favorable terms while mitigating risks. Here are the key points to consider:

1. Price Increase: The supplier has requested a 10% price increase. Given the current market stability and the slight bullish sentiment, negotiate to cap the price increase at no more than 8%. Emphasize the stable market conditions and the recent stock value trends to support your position.

2. Contract Term: Aim to extend the contract term to 3 years. This will provide price stability and reduce the frequency of renegotiations. Highlight the benefits of a long-term partnership and the potential for mutual growth.

3. Price Protection Clause: The current clause is partial/capped, which poses a medium risk. Negotiate for a more favorable clause, ideally a full price protection clause to safeguard aThe current stock value of Aluminium has shown some fluctuations over the past year, with the latest value being approximately $2352.47 per metric ton. The market news sentiment for the most relevant companies (Alcoa, Century Aluminum, and Kaiser Aluminum) is generally neutral to somewhat bullish, indicating a stable to slightly positive market outlook for Aluminium.

Strategy

Given the criticality of the supplier (Tier 1 - Business Critical) and the high risk associated with the contract, the negotiation strategy should focus on securing favorable terms while mitigating risks. Here are the key points to consider:

1. Price Increase: The supplier has requested a 10% price increase. Given the current market stability and the slight bullish sentiment, negotiate to cap the price increase at no more than 8%. Emphasize the stable market conditions and the recent stock value trends to support your position.

2. Contract Term: Aim to extend the contract term to 3 years. This will provide price stability and reduce the frequency of renegotiations. Highlight the benefits of a long-term partnership and the potential for mutual growth.

3. Price Protection Clause: The current clause is partial/capped, which poses a medium risk. Negotiate for a more favorable clause, ideally a full price protection clause to safeguard a

4. Price Increase: The supplier has requested a 10% price increase. Given the current market stability and the slight bullish sentiment, negotiate to cap the price increase at no more than 8%. Emphasize the stable market conditions and the recent stock value trends to support your position.

5. Contract Term: Aim to extend the contract term to 3 years. This will provide price stability and reduce the frequency of renegotiations. Highlight the benefits of a long-term partnership and the potential for mutual growth.

6. Price Protection Clause: The current clause is partial/capped, which poses a medium risk. Negotiate for a more favorable clause, ideally a full price protection clause to safeguard a2. Contract Term: Aim to extend the contract term to 3 years. This will provide price stability and reduce the frequency of renegotiations. Highlight the benefits of a long-term partnership and the potential for mutual growth.

7. Price Protection Clause: The current clause is partial/capped, which poses a medium risk. Negotiate for a more favorable clause, ideally a full price protection clause to safeguard a3. Price Protection Clause: The current clause is partial/capped, which poses a medium risk. Negotiate for a more favorable clause, ideally a full price protection clause to safeguard against unexpected price hikes.

8. Possible Transition Costs: The transition costs to alternative suppliers are high ($500,000). Use this as leverage to negotiate better terms with the current supplier, emphasizing the cost and disruption associated with switching suppliers.

9. Total Cost of Ownership (TCO): The TCO without change is $1,650,000, while with change it is $1,700,000. Highlight the cost efficiency of staying with the current supplier and negotiate to keep the TCO as low as possible.

10. Number of Alternative Suppliers: There are 2 alternative suppliers available. Use this information to create competitive pressure, but also acknowledge the high transition costs to strengthen your negotiation position with AluminiumY.

11. Risk Level: The risk level is very high. Stress the importance of a reliable supply chain and the critical role AluminiumY plays in your operations. This can help in negotiating better terms by emphasizing the mutual dependency.

12. Spend: The current spend is $15,000,000. Use this significant spend as a bargaining chip to negotiate volume discounts or other favorable terms.

By focusing on these key dimensions and leveraging the current market conditions, you can negotiate a renewal contract that minimizes costs and risks while ensuring a stable and reliable supply of Aluminium.