Does an annual frame agreement have to run 12 months?

Answer: Most do, to match budget and production cycles. A first engagement can open at 6 months and renew once the tiers have held twice.

How is the ±8% band chosen?

Answer: By the material share of unit price. Above 35% with heavy volatility, tighten to ±5%; below 20%, widen past ±8% so repricing stays quarterly.

Does a 45-day cover choke cash flow?

Answer: It depends on settlement. Consignment spends supplier money until withdrawal; self-held stock spends the buyer's, where 30 days is steadier.

Is a 7-day peak extension enough?

Answer: September to November usually stretches 5 to 9 days, so 7 is a usable midpoint; anything beyond runs through the penalty clause.

Should tiers count one release or a year?

Answer: A year. Single releases rarely cross a tier, so a rolling 12-month total with quarterly settlement lets small orders reach it.

Annual Frame Agreement for Cases

Quick answer: An annual frame agreement locks price mechanics, lead-time tiers and stock ownership in advance, so each release confirms only quantity and date.

Three clause groups the agreement freezes
Price mechanics: base price, index linkage, volume tiers
Three lead-time tiers: standard, stocked, peak season
Stock and consignment: who owns it, who settles
Quarterly review and five annexes
FAQ

1. Three clause groups the agreement freezes

An annual frame agreement runs 8 to 12 pages of main text, and the pages that decide outcomes are its 5 annexes: price, volume tiers, lead-time tiers, stocking list, inspection requirements. Rules sit in the text, numbers in the annexes, so a resin move costs an annex revision instead of a signed contract. Set the term at 12 months to match the plant's production plan.

Each group fails differently. Price mechanics fail quietly, since resin rises and nobody asks while it falls and nobody credits. Lead-time clauses fail in peak months, when the promised date stops beating the quiet season. Stocking clauses fail on the shelf, where goods of unclear ownership cannot be booked by finance or committed by sales. None of it is repaired by negotiating harder, only by wording.

Nor does it replace purchase orders. The order carries quantity, colour, print copy and address; the text carries how those are priced and scheduled. Late delivery sits on a day rate: at 0.3% per day capped at 5%, the cap lands near day seventeen, after which only recovery moves remain.

2. Price mechanics: base price, index linkage, volume tiers

Layer one is the base price, a weighted average over the 3 months before signing, recorded with its basis: tax inclusive or exclusive, delivered or ex works, packing in or out. Left open, the first invoice becomes a discussion about memory.

Annual Frame Agreement standard-item tier, a closed black case with two red latches gripping the rim and a moulded side handle

Layer two is index linkage. Inside a ±8% band the price holds; beyond it the excess is shared at an agreed ratio, commonly 40 to 60, the direction set by whoever holds the stronger position. Repricing is proposed in writing 30 days ahead, index printout attached.

Layer three is the volume ladder: four tiers at 500, 2000, 5000 and 10000 units, with 3% to 6% between neighbours and wider gaps at the bottom. State whether a tier counts a single release or a rolling 12-month total; the readings differ by a whole tier.

Layer four is annual cost reduction. A 3%–5% target survives only if it is tied to a trigger: amortisation finishing, a tier moving up, a structural change landing. Unconditional cuts become a yearly tug of war, the supplier recovering through material and the buyer through incoming inspection. An annual frame agreement holds only when all four layers are written; a base price alone drifts from the market.

Element	What to write	Typical value
Base price	Basis, window, tax treatment	Weighted average of prior 3 months
Index linkage	Band, sharing ratio, cycle	±8% band, excess split 40/60
Volume ladder	Tier count, counting basis	4 tiers: 500 / 2000 / 5000 / 10000 units
Annual reduction	Depth, trigger, effective month	3%–5%, effective each January
Repricing procedure	Format, notice period	30 days in writing with calculations
Settlement check	Frequency, recheck trigger	Quarterly, recheck above 2% variance

3. Three lead-time tiers: standard, stocked, peak season

Lead time needs three tiers rather than one number. Standard items run 15 days, meaning regular colour, no printing, no insert. Stocked items run 5 days, meaning specifications listed line by line in the annex and built ahead of forecast. Peak season from September to November adds 7 days, and that extension belongs in the clause rather than an autumn notice.

Tier definitions have to point at part numbers. The stocking list is agreed line by line and typically covers the top 20% of specifications by 12-month volume, so anything off it defaults to the standard tier. Sales can quote without over-promising and purchasing stops confirming by phone.

The start point causes most disputes. Counting from order confirmation hands every hour of artwork and colour approval to the supplier; counting from the last approved artwork is fairer, provided approval carries a clock, with 3 working days of silence treated as accepted.

4. Stock and consignment: who owns it, who settles

Stocking is where frame agreements quietly accumulate bad debt. Cap the programme at 3 months of usage and cover 45 days with safety stock: turnover rides the 45 days, variation the remaining allowance, anything past the cap returns to ordinary orders. The cap stops impulse buying, not warehouse filling.

Annual Frame Agreement consignment count, black case opened upright with an empty interior, hinge line across the middle and two red latches flipped up

Category	Standard lead time	Stock level	Inventory owner
Standard item, regular colour	15 days	None, built to order	Buyer, on dispatch
Stocked item, listed part	5 days	45 days of cover	Supplier holds, settles after use
Consignment, high runner	5 days	Capped at 3 months	Supplier holds, settles in 60 days
Custom colour or printed	20 days	None	Buyer, on release to production

Ownership answers three questions: who pays storage, who takes the write-down, whose count variance it is. A consignment clause needs a location, a book owner, a monthly reconciliation date and a settlement trigger, whether a withdrawal slip or an invoice. Settling 60 days after use is common, but pair it with a minimum turnover requirement, or stock sits for two years while the balance hangs open.

Slow-moving liability should be split before it appears. The usual split runs on-list against off-list: listed parts going 6 months without withdrawal are shared back at an agreed ratio, off-list parts are never stocked and never create liability. How liability is allocated is a matter for the contract and the applicable local rules.

5. Quarterly review and five annexes

Review keeps an annual frame agreement alive after signature. Once a quarter, with 4 fixed agenda items: index against settled price, achievement against the three tiers, changes on the stocking list, open quality claims. Minutes feed the annex revision page, and the next quarter runs on it.

All 5 annexes carry a version number and an effective date. Price moves quarterly, lead-time twice a year, the stocking list monthly, while inspection follows the drawing revision. Record the version in the order reference field so reconciliation reads only the version the order cites.

Leave room to exit: a 60-day written notice, orders already placed running to completion, stocked goods handled per the list, and a separate clause for moulds and gauges.

Conclusion

An annual frame agreement earns its keep through arithmetic, not length: a base price with a stated basis, a ±8% band sharing the excess 40/60, four tiers over 12 months, a 3%–5% reduction tied to a trigger, 15-day and 5-day lead times plus 7 days in peak season, a 3-month stock cap against 45 days of cover settled in 60 days, and late delivery at 0.3% per day capped at 5%. Detail at that level gives the quarterly review something to measure.

This article discusses only the container (case body) side of specifications and design intent, and does not cover any handling, loading or use of the contents.