A common risk management mistake is waiting for the worst to happen before taking decisive action. Understanding that things will go wrong – it’s not a question of ‘if’ but ‘when’ – sets a sturdy foundation for your risk strategy.
In February, Procurement Leaders chaired a virtual roundtable that brought together global supply chain managers, directors of procurement and heads of third-party risk management from an array of industries. Participants discussed their approach to risk and shared insights from their respective sectors and jurisdictions. Although members agreed procurement teams cannot prepare for every eventuality, leading organisations are forming successful risk management strategies and measuring their performance.
Change mindsets from ‘if’ to ‘when’
In many cases, it is only after an incident that organisations assess their risk processes. Procurement chiefs who wait until disruption impacts their supply chain could find their organisation pays a heavy price given the volatile, uncertain and interconnected nature of modern threats. In fact, Procurement Leaders’ Risk planning guide 2020 research shows that 96% of CPOs surveyed experienced an unexpected supply chain disruption over the past 12 months.
Despite advances in support capabilities, most procurement functions’ risk management practices continue to be reactive. A proactive approach is needed to meet emerging cybersecurity threats and global trade uncertainties, as well as health, safety and environmental risks.