Building buy-in for Supply Base Management

Risk management in procurement is similar to exercising: everyone knows they should be doing it but can’t find the will or time to actually do it.

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Date

Wednesday, July 3, 2019

Risk management in procurement is similar to exercising: everyone knows they should be doing it but can’t find the will or time to actually do it.

The best way to go about this is with a properly implemented and adopted supply management system such as Scanmarket’s SBM which will help you with the following:

  • Know which suppliers might be affected
  • Communicate efficiently with the affected supplier
  • Quickly find alternate sources of supply if needed
  • Keep and maintain everything current and in one place
  1. Know – One of the most difficult steps is to quickly determine which inputs and/or suppliers might be affected, for example during times of natural disasters. In the “old days”, this meant hunting through emails, spreadsheets and databases that were, by definition, outdated the day after they were created. By using a supply management system, you can quickly determine which suppliers are at risk (e.g. suppliers located on the Gulf Coast during tropical storm Gordon) and take appropriate action.
  2. Communicate – Once you’ve identified a segment of suppliers, the supply management system allows you to communicate with that segment in an organized manner and maintain all the communications in one place. You will also be able to solicit structured information such a templated RFIs or questionnaires.
  3. Find – If you’ve had a major input or supplier impacted by a “force majeure” event, you’re going to need another source quickly. And keep in mind that your competitors will also likely be looking for the same thing. In other words, moving quickly will be key to success. Starting up a supplier discovery and qualification effort after the fact is not going to work. Instead, you’ll want to have access to a pre-qualified set of suppliers who can quickly fill the void.
  4. Maintain – The key advantage of supply management platforms is, that maintenance of the data becomes the responsibility of the supplier, not your team. In addition to requiring less effort by your team, having the supplier “own” this data means there’s a much better chance of it being up to date and accurate. Even better, there are now multiple options to create system-to-system connections through web-service APIs to further reduce the effort required.

If you’ve been advocating internally for a supply management platform but have struggled to get buy-in from executives or Finance, now’s the time to bring it up. While there’s a chance you might never need it in an emergency, Supply -and proper risk management practices should be considered in the same vein as insurance; you hope to never use it but wouldn’t dream of living without it.

For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at www.scanmarket.com or contact your Scanmarket Account manager.

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