Increasingly, top executives view supply markets as sources of competitive advantage and as means of achieving strategic objectives. Procurement is the management activity that makes this happen, and this process depends on a superior risk management capability if it is be effective. Yet, despite its importance, Procurement Risk Management is surprisingly under-developed. Recent Global Risk surveys have pinpointed Supply Chain Vulnerability as one of the four key global risks for the next decade. What is less well known is that this is only half of the story … risk exposures also exist inside the company and can be just as damaging. No company is an island; it needs suppliers as well as customers. Conventional wisdom puts great emphasis on managing certain aspects of business such as customers; operations; strategy and finances. Typically, however, much less regard is paid to external suppliers and the risks present in dealing with them. As a minimum, suppliers are the sources of materials, services and expert attention which enable the company to feed its business model. When done well, a risk-aware procurement process provides the bonus of competitive advantage, with the ability to capitalise, on the occurrence of unexpected events. This short guide explains just how to do it. Each chapter explores the topic in hand, outlines the risks and the remedies available and offers guidance on the principles and risk prevention.
'This book calls itself ’a short guide’. It is not. It may be small on the outside but it is big on the inside. It is packed with useful information, for the procurement professional, for the supply chain manager, for the CEO, for any business owner. Even for the supply chain risk researcher, who is likely to find he exhaustive list of risks particularly useful. Truly, this book is about so much more than procurement, it is about so much more than the supply-side risks in the supply chain, it is about any kind of business and how to do your business well.' Jan Husdal, husdal.com 'I’m genuinely amazed at the breadth of risks that this little book covers…In this Guide Richard describes the journey to build good procurement risk management; what is at stake, how to describe and address it. He goes further to show how to build commitment across the wider business cross-functional team, raising the profile of the procurement process and know-how, shaping and developing expertise that actually builds collaborative working in the business. These are critical and highly valuable goals for every Senior Leader seeking to deliver sustainable value and high performing teams. Richard provides sound advice, tools and techniques based upon real case studies and significant experience which he lays out in seven easy-to-digest chapters…valuable reading to everyone whether an experienced procurement professional, newcomer or a leader, who cares about the shape and health of their business. The Guide has many practical tips including sound techniques e.g., self assessment tools and checklists but more valuably, it has many ’little gems’ that make the reader reflect and think much deeper than the mechanics of a risk management process…A well thought through journey from which you will benefit from the sound advice provided by experienced and knowledgeable sources from which you can help yourself - enjoy! - Paula Gildert, Head of Development Strategic Sourcing,
Contents: Introduction; Procurement and risk - the big picture; External dependencies; Market conditions and behaviours; Procurement process; Management controls; Handling the unexpected; Procurement risk management - an integrated approach; Index.