The succession of crises has highlighted the need to rethink and strengthen its approach to risk management. In fact, the purchasing function is at the center of the game! It must develop practices, processes and tools to assess, anticipate and secure relations with its supplier ecosystem.
The succession of crises, some of them unprecedented, the scarcity of raw materials and soaring prices, as well as the high level of inflation, have shaken companies, forcing them to rethink their risk management. Threats are becoming more and more protean, more and more sudden and high, with extremely strong potential impacts on the continuity of a company’s activities.
The purchasing function is at the center of the game and is responsible for controlling its supplier ecosystem. To best manage the challenges inherent in what is traditionally called the « third party », the Purchasing Function must develop or update its risk management strategy. These foundations are a prerequisite, but not sufficient to make this policy operational. It is then up to the Purchasing Function to anchor this approach in the processes and tools and to deploy it effectively by raising awareness and training employees.
Identify the sources and families of risks linked to the markets and endogenous/exogenous to your suppliers.
Develop a risk criticality matrix by evaluating, scoring, and prioritizing their probability and impact.
Define an action plan for each purchasing area, based on the nature of the impact and the company’s purchasing strategy.
Make the risk strategy operational by adapting the processes, defining the management tools, and training your employees to take it into account efficiently.