By Dennis Bouley
According to the recently conducted “2018 Procuring Risk: The State of Risk Management and Mitigation in Today’s Global Supply Chain” survey, most organizations appear ill equipped to deal with growing risk within their critical supply chains. Of the 250 procurement leaders surveyed:
The data is clear: organizations are struggling to quantify and mitigate risk threats. According to Bill DeMartino, General Manager riskmethods, North America the sponsors of the survey, “An organization’s ability to identify risks and make informed business decisions based on the potential impact of those risks, is what will set them apart from the competition.”
Categories of procurement-related risk now span to cybersecurity, supplier financial risk, governance and compliance risks and all the way through to the historical elements of whether a supplier is delivering product on time.
The cybersecurity risk in particular is one that many stakeholders are not prepared to confront. As operations across industries digitalize their operations more and more, digitization and cybersecurity are 100% linked. Therefore, one should not move forward without the other. Each organization along the procurement value chain, be they suppliers, procurement staffs or business operations solutions providers has the responsibility to understand where cybersecurity vulnerabilities lie within their particular operations.
For many in procurement, the challenge is to first identify the sources of risk and then manage those identified risks. Unfortunately, no operation Is risk-free. Failing to address risks results in significant disruptions to the supply chain. These delays are costly and can negatively impact relationships with customers and suppliers, as well as the corporate brand.
Additional survey findings point to a growing need for acquiring risk-related analysis data. Just under half (47 percent) of survey respondents had experienced between one and five significant supply chain disruptions over the last 12 months, with 13 percent indicating 20 or more significant disruptions.
In the area of risk management, success or failure lies in the ability of procurement to make informed decisions based on the understanding of current risk factors and potential impact. As the number of potential risks/ threats continues to accelerate within the global supply chain, access to information that is accurate and actionable will continue to grow in significance.
To access the full “2018 Procuring Risk: The State of Risk Management and Mitigation in Today’s Global Supply Chain” survey results click here.
riskmethods provides SaaS, cloud-based supply chain risk management solutions that address the entire lifecycle of identifying risk, assessing impact and enacting plans to prevent or mitigate risk. riskmethods customers benefit from proactive monitoring and assessment of risks in the supply chain. An early warning system for potential risks, ensures that preventative steps can be taken to avoid supply interruption, enforce compliance and protect the corporate image. The SaaS solution, which was developed in Germany, combines state-of-the-art technology with cutting-edge provision of risk intelligence, to establish a leading standard in supply chain risk management.
Dennis Bouley is Editorial Director of MyPurchasingCenter.com and special advisor to MediaSolve Group, a strategic B2B marketing services firm focused on helping companies and institutions leverage the web and social media to achieve business goals. He spent 18 years at Schneider Electric as Managing Editor of Global Publications, and was responsible for cross-division management of the corporation’s white paper and customer success story processes. Prior to that, he spent 10 years working for IBM managing both small and large accounts. He holds a Bachelor of Arts in Journalism from the University of Rhode Island and holds a Certificat Annuel from the Sorbonne in Paris, France.
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