More than 70% of CPOs believe innovation will be a priority to adjust complex supplier networks, research from Portt has revealed.
In its white paper, How to Mitigate Supplier Risk in 2023, Portt has explored what’s affecting global supply and supplier performance, including ongoing impacts of COVID-19 and the Ukraine war.
The white paper also includes innovative strategies and tips procurement professionals can implement to alleviate supplier risk and optimise your supplier management.
Portt says many organisations have limited visibility to the factors affecting their suppliers and supply chain, especially beyond their Tier 1 suppliers. This leaves the door open to an increase in risk and disruption. Only 15% of CPOs surveyed had visibility into risks in their tier 2 suppliers.
In looking ahead to 2023, Portt says the repercussions of the pandemic will still loom.
“Despite being nearly two years on from the pandemic, businesses are still facing the challenges caused by COVID-19. Logistics disruptions that stemmed from the pandemic continue to impact both companies and consumers, as the movement of consumer goods into key global markets remains limited by the interference to major global ports and airports,” the whitepaper states.
On innovation being a priority, the whitepaper states in order to navigate complexities, procurement teams and CPOs should look at their internal processes. In quoting the Deloitte Global Chief Procurement Officer Survey, Portt says high-performing CPOs have been driving innovation by re-evaluating “legacy processes, policies, metrics, tools, and mindsets”. All are “key factors to maintaining agility throughout the supplier lifecycle,” Portt says.
The paper recommends five actions procurement teams can implement straight away:
- Implement ongoing risk management – prioritise risk management throughout the supplier relationship.
- Use technology for accurate insights – have right-time analytics
- Manage supplier data efficiently – add on-going reports and keep details up-to-date
- Establish clear KPIs – track supplier performance through KPIs such as lead times, invoice accuracy, compliance rate, emergency spend, customer service and ROI and benefit tracking.
- Consider a regional or local approach – Having a supply chain closer to home and utilising local suppliers can provide more control and flexibility.
Download your copy of How to Mitigate Supplier Risk in 2023
