A majority of C-suite executives fail to recognize the pivotal role that procurement can play in effective risk management.
While risk can take on many forms, in the world of procurement, there are a few different components to risk. First, procurement teams need to understand the risk in the different tiers of their supply chain — this includes understanding the direct supplier risk (financial, quality, innovation, etc.) as well as the potential reputational risk in using the supplier. According to a report from Interos, this needs to be repeated as far down the differing tiers of the supply chain as possible, as most issues in supply chains happen deeper than the first level.
In doing so, organizations will have a clearer assessment of the suppliers they are working with and whether those suppliers align with their own company policies and values such as meeting demands or ensuring regulatory compliance.
As organizations think about supply chain risk and, in particular, supply risk, they can better anticipate risk by having visibility, transparency and collaboration both with suppliers and internal stakeholders on business needs and capacity. Knowing the suppliers, sharing…
