Organizations have hundreds of suppliers who in turn have hundreds of sub-suppliers. Organizations cannot conduct their business entirely on their own – suppliers really are an extension of your business. Some of these suppliers, both primary and secondary (sub- suppliers), can be critical or strategic to your business.
An unseen or unanticipated supplier failure can expose, disrupt or threaten your entire business. The reality is, many companies do not know where these risks exist, nor do they know how to manage them. Risk should not be reacted to, risk must be foreseen and anticipated if it is to be managed successfully.
At Procure.ps, we view Supplier Risk Management as fundamental to the continuity of the business and a competitive enabler, if implemented and managed correctly. We recognize the importance of such supply chain risk and suppliers can impact your organization. Studies conducted by leading insurance and consulting organizations clearly demonstrate the impact to share price and sales:
- 8.9% reduction in share price in the period after a supply chain disruption
- 4.1% drop in average Return on Sales one year after supply disruption
We help our clients to identify where risks occur and to assess the level of risk and its potential impact. We then engage with clients to address the risk and implement mechanisms to manage supplier risk on an ongoing basis.