Where Is The Weak Link In Your Supply Chain?

Do you know?

If your answer is no, you’re not alone.

Given the weird and wacky economic climate of the past couple years, lots of businesses large and small haven’t been able to sustain their business model, and have shuttered their doors.

It’s a fact of life in a down economy, or any economy, really.

I know that many of our Procurement Heroes have had to scramble recently to replace a supplier that suddenly and unexpectedly failed.

So you’d think after being bit by the rattlesnake once, twice, ten times, we’d learn.

You’d think we’d be the best profession in the world for assessing supplier risk and finding ways to mitigate it.

You’d be wrong.

I was startled to read a headline today on the Procurement Leader’s website that proclaimed “Procurement risk management ‘under-developed’“.

In a report published by “Research and Markets, they find that procurement is not only ignoring supplier risk assessment, but risk factors across the board.

I understand why this is happening, too busy, understaffed, changing priorities but really there cannot be an excuse. Particularly on the supply chain side of the house where the tolerances between making manufacturing goals and whiffing them entirely because of one constrained part are very slim.

Procurement Heroes everywhere…this economic situation is not going to improve anytime soon. Start thinking about all sides of the risk associated with every deal you do. It’s up to you, the overworked buyers, contracting reps and supply chain managers to raise the red flag and get your management on board.

As the report concluded, “…when done well, a risk-aware procurement process provides the bonus of competitive advantage, with the ability to capitalise on the occurrence of unexpected events.”

I couldn’t have said it better myself.