Supply Chain Risk – Procurement to the Rescue!

November 15, 2021
Greg Holt

Lay people often see the procurement organization as a back-office function whose role in managing the supply chain is to deliver consistency and control over spending processes.

Those who encounter procurement infrequently, such as making a one-off purchase request, may view procurement as a necessary evil.  “Of course we need to manage our spend, but why can’t I just buy what I need when I need it?”

Those who are in the know recognize procurement as something else entirely: buyers, planners, category leaders, contract negotiators, developers of strategic suppliers, financial stewards, and risk managers.

For many organizations, procurement has become the humble hero who has kept the wheels of industry turning during these challenging times. They’ve identified weak spots in the supply chain, alerting stakeholders to impending challenges. They’ve aided the CFO in managing cash and improving working capital. They’ve driven corporate ESG initiatives into a broad base of suppliers, and they’ve responded quickly and with agility to ensure supply when sources slowed down or dried up completely.

Becoming a Supply Chain hero

Procurement’s visibility within the executive board room may be at an all-time high, and their contributions have led to even higher expectations. Many procurement teams are embracing this momentum to deliver much-needed initiatives to improve operational resilience across their supply chains.

I recently participated in a fireside chat during the America’s Procurement Congress with James Westgarth, Senior Director of Procurement Performance, Systems & Excellence at Lufthansa. He was too modest to claim the “hero” title, but what he shared with the audience regarding Lufthansa’s procurement team’s response to the COVID-19 pandemic is genuinely remarkable. For an organization that was essentially spending one million Euro per hour, they stepped up to support cash management initiatives while pivoting buying programs to identify new sources and cost savings. James is one of many procurement practitioners I’ve spoken to recently that have embraced agility to keep their businesses running.

Check out the recording of this fireside chat to hear James’ thoughts on resilience, agility, procurement’s role in ESG, and the skill sets required for procurement teams of the future!

Wear that cape with pride

The multi-faceted aspects of supply chain risks have become abundantly clear over the last few months. Organizations must become more aware of their supply chain partners and the sub-tier suppliers that make up their extended supply network. And procurement is taking the lead on gaining visibility across risk factors from financials, governance, and location-based risks to environmental impacts, labor practices, and geopolitical issues.

“We didn’t see that coming” isn’t an acceptable answer anymore. In a post-pandemic world (assuming we’ll get there someday), digitalization and the use of data and analysis in planning and risk management have taken on renewed importance. The whole organization, especially procurement teams, must uncover the hidden risks that could cause ripple effects up and down the extended supply network.

During our conversation, James and I agreed that operational resilience requires agility, and agility requires visibility. Detecting an impending disruption further upstream in the supply chain provides more time to analyze, plan and execute a response.  Organizations with deeper and broader visibility of risks across their extended supply networks will be more agile and the most resilient.  And they can thank their procurement teams for the heroic work that happens behind the scenes.

Join us! James and I will dive deep into this topic during an online panel on November 18. Click here to learn more and sign up!

In the meantime, for more information on how AI and machine learning can help tackle supply chain risk and build operational resilience, check out interos.ai.

 

 

View Previous

Ensure Operational Resilience

Request Contact

Build operational resiliency into your extended supply chain:

  • 889 compliance – ensure market access
  • Data sharing with 3rd parties and beyond – protect reputation
  • Concentration risk – ensure business continuity
  • Cyber breaches – assess potential exposure
  • Unethical labor – avoid reputational harm
  • On-boarding and monitoring suppliers – save time and money