Implementing a Framework Around Global Supplier Risk

In today' s globalized economy, companies rely on a large and increasingly complex network of suppliers. These complex ecosystems can offer undeniable advantages for the business: they can unlock cost efficiencies, enable unparalleled scale, and propel value-add activities.

But a complex supply chain means risk isn’t just a probability, it is an inevitability. Any one of these suppliers, or the supply chains that support them, can be associated with a variety of risks, with operational, financial, geopolitical, regulatory, and environmental sources. Addressing the inevitable risks in the supply chain is a reality every procurement team has to face.

Companies are constantly walking a tightrope between extended or distributed sources of supply and the difficulties associated with managing them. Every news story about supply chain disruption, regardless of industry, may highlight a new threat that has not been evaluated. The most effective supplier risk frameworks are dynamic, and they are kept alive and aligned by the teams who manage and oversee them.

In order to be leaders in the supply chain risk space, executives need to expect disruption and develop a structured way to anticipate and manage risk. Having a framework in place that enables procurement to scan for new threats, update mitigation plans, or strengthen alternatives, and then move on to the next risk event is not only key to their success, it is essential to the success of their company.

This whitepaper, written in partnership between AOP and YCP Consus, will explore the critical role of risk assessment as well as how supply management professionals can create a framework for approaching comprehensive risk assessment and develop mitigation and monitoring strategies to continuously scan for risks that are on the horizon.