How effective are you at managing supplier risk and purchasing strategically?

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Information about How effective are you at managing supplier risk and purchasing...
Business & Mgmt

Published on March 6, 2014

Author: louisegreen123



How effective are you at managing supplier risk and purchasing strategically?

How effective are you at managing supplier risk and purchasing strategically? Ted Datta Strategic Account Director BvD UK & Ireland

1. What are the current challenges…. …facing the procurement industry …and, the procurement professionals we know 2. Let’s focus on risk 3. Answering the “so-what” question…

Familiarity with global supply chains

Responsibility to source ethically

Pressure to deliver value

SMEs continue to struggle across Europe 30,719 entered receivership in the last 2 weeks 11,371 manufacturing, construction, logistics, telecoms 520 + 50 employees +7% vs LY

What are our clients saying? “we need to harmonise risk scorecards with our credit insurers and finance systems…” “we need to source in emerging markets and understand the risks involved…” Leading car manufacturer “our buyers don’t have time to waste trawling the net for information on suppliers…”

What are our clients saying? “we need to stop creating duplicate suppliers, it’s wasting time and money…” “I’m sure we could be leveraging our buying power more effectively…” Global logistics provider “if our suppliers don’t deliver, it’s our reputation at stake…”

Let‟s focus on risk “The effect of uncertainty on objectives” Source: ISO “25% of procurement functions have only a basic level of maturity around risk management” Source: KPMG

What can business information help with? 1. Financial risk – “continuity of supply” 2. Structural risk – “stability & sustainability” 3. Reputational risk – “ethical credentials”

1. Financial risk: traditionally boiled down to this…

1. Financial risk: but the world has changed…

1. Financial risk: a broader perspective Propensity of bankruptcy Environmental risk Probability of default Peer group stability

1. Financial risk: compare multiple ratings

2. Structural risk: predicting supplier behaviour Lifestyle / Family vs. Multi-national / Private Equity

2. Structural risk: reality behind the „company façade‟

2. Structural risk: reality behind the „company façade‟

3. Reputational risk: sourcing a new strategic partner?

3. Reputational risk: but who are you actually buying from?

3. Reputational risk: media monitoring Negative Positive

Answering the “so-what?” question… “…the success of commercial intelligence as a business tool can be directly related to two critical factors…” 1.Relevance of information to the procurement individual 2.Ease of use

Clean your supplier data Internal data Common identifier External data Inactive suppliers Duplicates records

Blend it with external data

Making it relevant Management Dashboards Category Analysis Buyer Reports

Visibility of critical risks

Impactful reports for buyers

Information that drives cost savings How important is our business to theirs? Are we leveraging our total spend across their group?

Measure effectiveness Alerts Actions

Develop your “toolkit”

Insist on proper training and support

Stand 12

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