With the COVID-19 pandemic in full effect, businesses are working hard to manage risk and minimise the negative impacts.
We’re seeing this first-hand with existing clients and other, potential clients who are all trying to gain an understanding of their spend, their exposure to the impact of lockdowns and supply shortages, and methods of mitigation.
In 2017, we asked C-suite executives questions on procurement risk readiness as part of our global survey, Procurement 2020. At the time, 55% of respondents said risk management was one of their top priorities in the coming years – it turns out they were right to prioritise that.
It’s also of little surprise that the largest companies we surveyed were the most risk ready with 55% again having actions already in progress. The fact that large companies are the most risk ready remains true today; after all, they have more available resource to assign to such modelling. Small-to-mid sized companies with revenues in the 100s of millions don’t have the same ability to be on top of this as a Fiat Chrysler or Apple.
That being said, how many businesses can trace all their supplies to source? It’s very difficult for smaller companies to gain a full underestimating of their exposure, but equally difficult for some mid and large sized companies. There is a risk that they will hit a wall down the line and find themselves scrambling for new supplies.
We’re working with clients to get on top of this and be proactive in managing their risk. To do this we are focusing on the following 6 areas to help reduce the potential impact on their businesses.
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