Supplier Risk Management - Improve Supplier Visibility and Minimise Risk

Charlotte Sutton
Charlotte Sutton,
In today’s complex world, a comprehensive supplier risk management capability is quickly becoming mandatory 
Organisations are currently wrestling with the challenges of managing a more complex network of suppliers and an increased scrutiny by a range of stakeholder groups including regulators. At the same time, they are dealing with major business disruptions caused by external providers. Many business executives do not have the right level of visibility of even their first-tier suppliers. That can leave them blind to supplier risks buried deep in their supply chains and extremely vulnerable to a failure of a tier-two or tier-three supplier. 

Compliance with Regulatory Requirements

However, many organisations in most private, not-for-profit and public sector organisations are now identifying the imperative need to consistently maintain accurate, up-to-date information for their entire supplier base. They are recognising that, in addition to needing supplier information to support purchasing and accounts payable activities, it is critical to maintaining compliance with regulatory requirements and effectively managing risk associated with supplier non-performance and non-compliance. 

A Framework to Improve Supplier Visibility 

Risk management must be built into organisation’s ongoing supplier interaction in order to be effective. Executives who want to operate successfully need a framework to improve supplier visibility, deal with ambiguity, and work more collaboratively.  PROACTIS is seeing an increasing number of organisations adopting Supplier Relationship Management (SRM) software solutions as the most cost-effective way to enable the capabilities they need.  

SRM: A Top Priority 

In a June 2016 PROACTIS survey of a wide range of private sector, public sector and not-for-profit organisations regarding the deployment of various types of eProcurement solutions, Supplier Relationship Management (SRM) was near the top of the list of solutions those organisations intend to deploy. Although only 16% of those organisations said that they currently have partial or full automation of the SRM process in place today, 94% said that they plan to automate the process in the next couple of years and a sizable 52% said they plan to focus on SRM in the next six months.  
“Whether they refer to it as Supplier Relationship Management (SRM) or Supplier Information Management (SIM), many organisations are recognising that a methodical, comprehensive approach to supplier interaction and monitoring is becoming virtually mandatory,” said Simon Dadswell, Group Marketing Director at PROACTIS. “I would add that those organisations that have already deployed PROACTIS SRM tend to have high levels of satisfaction. It is generally seen as a tool that delivers results and supports Procurement’s goals for risk reduction, improved supplier relationships and improved supplier communication. We think formal, software-assisted SRM will become an almost universal part the Procurement landscape over the next few years.”  
PROACTIS will be hosting a webinar titled “Supplier Risk Management - It's Time to Take Control” on Thursday 15 December – find out more and register your free place. Or alternatively, download our Supplier Risk Management brochure.  

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