A quarter-end phone call
Your sales manager signed a contract with a reprocessor to supply a set tonnage of mixed plastics each month over the quarter, at an agreed price. He also agreed spot loads with two other buyers when the price was good. The yard has been shipping to whichever buyer's lorry turned up.
At the end of the quarter, the reprocessor's buyer rings. You are well short of the committed tonnage. They are not happy, and they mention the next contract. Meanwhile, material went to spot buyers at a lower price than the contract.
Nobody did anything wrong on the day. The yard loaded whatever lorry arrived, because a lorry waiting costs money. The sales manager agreed spot loads because the price was attractive that week and he believed the contract was on track. The shortfall was built from dozens of small, sensible decisions, each made without seeing the commitment they were eating into.
Why commitments get lost
Contracts are sales decisions. Shipments are yard decisions. Without a shared view, each is made without the other.
- Contract terms, tonnages and periods live in emails and memory.
- Shipments are recorded on weighbridge tickets but not linked to contracts.
- The yard sees lorries and bales, not commitments.
- Spot sales and contract sales draw on the same stock with no priority.
- Nobody sees a shortfall until the period ends.
What missed commitments cost
Falling short on offtake contracts damages relationships with the buyers you most rely on, especially when markets fall and spot buyers disappear. Consequences under the contract depend on its terms, but the commercial damage is real either way.
Selling to spot buyers when you have contract commitments at better prices is margin lost for no reason. Scrambling at the end of a period means expensive haulage and rushed loading.
There is a planning cost too. Without a clear view of what is committed over the coming weeks, production on the baling lines and sorting shifts is planned around whatever is in the yard rather than what buyers are waiting for. The wrong grade gets baled first, and the grade you need sits unsorted.
How we build a contract ledger
What we build puts every commitment in one place and records shipments against it.
- Each offtake contract is recorded with buyer, grade, tonnage, price or pricing basis, period, delivery terms and specifications.
- Each outbound load, from your weighbridge system, is assigned to a contract or marked as spot, with the net weight.
- The ledger shows, for each contract, tonnage delivered, tonnage remaining, days remaining and the rate needed to meet it.
- Stock by grade from your yard records is shown alongside, so you can see whether commitments are coverable.
- Alerts warn when a contract is falling behind the pace needed, in time to change priorities.
- Buyers' weights and settlements, when received, are recorded against the loads for reconciliation.
| Contract | Committed | Shipped | Remaining | Status |
|---|---|---|---|---|
| Reprocessor, mixed plastics | Per contract | From loads | Calculated | Behind pace |
| Mill, OCC | Per contract | From loads | Calculated | On track |
| Spot sales | None | From loads | Not applicable | Shown separately |
The quarter with a ledger
In the second week of the quarter, the ledger shows the reprocessor contract falling behind. The sales manager tells the yard to prioritise it and declines a spot offer for mixed plastics. The yard sees which buyer the next loads are for on the load planning screen.
By the end of the quarter the commitment is met. The buyer's next contract conversation starts on a good footing, and the spot sales that did happen were from surplus stock.
Are offtake commitments managed from memory?
- Contract tonnages and periods live in emails.
- Loads are not assigned to contracts when they leave.
- You have fallen short on commitments without knowing until the end.
- Spot sales have taken material you needed for contracts.
- The yard does not know which buyer each load is for.