Procurement professionals are always striving to not only make better decisions, but to make them more rapidly. The level of intelligence purchasing departments can attain on precisely where supply chain risks lie, as well as on the most cutting edge solutions to dealing with them, will dictate how successful they are in reaching these goals. According to Spend Matters, as supply chains become increasingly global, the possible threats become more and more of a moving target.
The World Economic Forum (WEF) recently released its 2017 Global Risks Report identifying risk areas for the forthcoming year, with the top five being:
- Economic growth and reform
- Rebuilding communities
- Managing technological disruption
- Strengthening global cooperation
- Accelerating action on climate change
Overall, environmental risks ranging from climate change to natural disasters are escalating as sourcing expands to more vulnerable regions. Procurement needs to be as keen as ever on how supply chain disruptions could affect their companies and dedicate more time and resources to planning for these potential risks. The cost of risk mitigation methods such as complexity reduction, early warning detection, faster recovery time, and financial insurance policies, as well as the ability of suppliers to deliver in these areas, needs to be specifically addressed when negotiating with vendors.