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Articles in category: Risk Management
On the business software company's acquisition strategy, its five-year plan to win, and why IBM isn't a frenemy.
Last week SAP, which supplies software that helps run the finances and operations of tens of thousands of companies, announced its 2014 revenues and cut its 2017 profit target. The reason? Its ongoing transition from a traditional software model (pay up front) to the as-a-service model used in the cloud (pay as you go) is depressing revenues. The company’s stock took a tumble.(Read Full Article)
A common question: will auditing the supply chain reveal issues that will prove costly and damaging? Is it best to leave as is until an issue manifests? If the last question sounds familiar then it’s definitely time to re-evaluate your approach.
In this guest post, Procurement Leaders invites Asia Pulp and Paper’s Ian Lifshitz to discuss why supplier audits can tend to fall short and where improvements can prove a huge game-changer.
The overall engineering and manufacturing (E & M) sector faces a myriad of issues around supply chain volatility, including dealing with natural disasters and supplier disruptions.(Read Full Article)
The recession and other business factors put procurement in the spotlight in 2014. The horse meat scandal that engulfed several supermarkets and slave wages in the supply chain of some clothes retailers are just a few examples. The demand for better supply management is likely to intensify in 2015 and beyond. Procurement functions will need to up their game to meet expectations! Here are some top tips for propelling your procurement success in the year ahead: • Think ‘people’ not ‘purchasing’.(Read Full Article)
There has been some interesting commentary lately in the business press about the desirability of risk insurance for companies as a protection against losses from a variety of hazards. For example, CFO Magazine recently touted the value of risk insurance. Other business-advisory sources mention buying insurance too as one of several risk-management strategies. Getting a risk-insurance policy is an interesting idea, but it occurs to me that firms already have a form of risk insurance: procurement.(Read Full Article)
In Friday’s post, we asked if you could solve the compliance challenge before it cost you tens or hundreds of millions of dollars. We noted that the biggest reasons for lack of compliance are lack of knowledge, policy, visibility, analysis, and procurement technology and the fixes are knowledge, policy, and appropriate technology.(Read Full Article)
New platforms are evolving that allow companies to verify and monitor their suppliers for conflict minerals and human rights abuses. Source Intelligence’s CEO explains how his platform works and is evolving.(Read Full Article)
The internal strife at SAA is attributed by insiders to battles over procurement and contracts.
SOUTH African Airways (SAA) chairwoman Dudu Myeni on Monday defied Public Enterprises Minister Lynne Brown’s instruction to immediately reinstate CE Monwabisi Kalawe, whom Ms Myeni suspended suddenly last week.
Ms Myeni’s refusal to co-operate with Ms Brown is the latest development in a boardroom battle at the airline in which Ms Myeni has found herself pitted against most of her former board colleagues, as well as Mr Kalawe. On Monday, a spokesman for Ms Brown, Colin Cruywagen, said she had requested written reasons ...(Read Full Article)
Leading company procurement organizations reap double the measurable cost reduction versus other companies, while also driving competitive advantage through supplier-driven innovation and risk management. While procurement organizations for leading companies have continued their upward trajectory, most companies only sustained the gains they made between 2008 and 2011.
These findings were reported in a study released today by A.T. Kearney titled “Procurement Powered Business Performance: Assessment of Excellence in Procurement (AEP) Study 2014.” This year’s AEP is the eighth edition in a series that started in 1992.
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As a two-year grace period soon expires, thousands of U.S. corporations are still scrambling to overcome severe obstacles to gather and authenticate a complex web of supply chain information to meet conflict minerals reporting requirements.
“In our analysis of Securities and Exchange Commission filings this year and through our detailed ongoing observations, far too many companies are severely lagging in getting commitments from suppliers to provide detailed information,” said Jess Kraus, CEO of Source Intelligence. “This is a huge obstacle, especially since we are fast approaching a key stage in Dodd-Frank – audited and verifiable reports on source materials.”(Read Full Article)
There are changes afoot, and what’s most important is not necessarily just the ascent to board-level recognition as much as it is a growing understanding of what procurement does and where its potential lies.
I admit a certain level of cynicism whenever I read about the c-suite increasingly viewing procurement as a strategic function.
JPMorgan Chase announced yesterday that the customer information of 76 million households may have been compromised. The personal data, which was under its care, was stolen in a hacking attack.
Currently, the bank is undergoing the blame game. Who is at fault? The risk guys? The compliance guys? Procurement?
The disclosure had come at the hands of a long-lasting hack. It was discovered in July, but criminals were accessing the names and contact details of households and over six million businesses since June. In total, they hacked into 90 servers.(Read Full Article)
We never used to think that much about risk in supply chains. Those were the days when most manufacturing was domestic or products were purchased from one or two international factories that we monitored closely. But oh, have things changed!
Now risk management is an important function within most supply chain organizations. Global supply chains have become longer, stretching worldwide; and with every stretched link comes the potential for a weak spot and additional risk of failure.
As a result, managing risk of failure in supply chains has become a hot topic. With events like 9-11, the Japanese tsunami, the ...(Read Full Article)
What do companies like Unilever, Johnson & Johnson, Proctor & Gamble, Wilmar International and Mars have in common? They’ve all made public commitments to implement a zero-deforestation policy throughout their supply chains. With several of these announcements happening over the last few months, it’s clear that major corporations are recognizing what’s good for the environment can also be good for the bottom line.
When done right and systematically, sustainability and zero-deforestation policies lead to improved brand image and build stronger business relationships with other organizations and customers.(Read Full Article)
While effective supply chain risk management programmes recognise things don’t always go according to plan, they also aid businesses build a more resilient operation in response.
The risks of supply chain disruptions aren’t limited to first tier suppliers and customers. The ability to access information from every part of the trading network in real-time can help businesses identify and anticipate risks, as well as inform the range of decisions needed to mitigate them. That visibility fuels the approach behind collaborative planning and execution.
Here are three ways to improve risk management across a company and its trading partner ...(Read Full Article)
World-class procurement organizations outperform their peers by striving to providing unique value beyond cost reduction, including becoming a trusted advisor to the business, driving supplier innovation, and focusing on risk management, according to new research from The Hackett Group, Inc.(Read Full Article)
According to The Hackett Group’s research, world-class procurement organizations now operate at nearly 20 percent lower cost as a percentage of spend than typical companies. They also have 27 percent fewer employees.
World-class procurement organizations now generate purchased cost savings equal to more than 9x the cost of procurement, according to The Hackett Group’s research.
I find it ironic that many organizations today look at supply chain risk from a unilateral perspective. The impact of natural disasters have repeatedly raised questions on organizations’ preparedness to tackle supply chain disruptions. Companies today look for geographical presence and spread of their key suppliers to ensure business continuity. But is that all a company should do to mitigate risk?(Read Full Article)
As companies pursue growth in an environment where operations risk is pervasive, and where supply chain risk has become a top priority, a robust risk management capability is key to designing and operating supply chains. A recent Accenture study of senior executives found that the majority believe supply chain risk management is important or very important.(Read Full Article)
Recent research from The Hackett Group claims that procurement’s ability to generate big savings is declining dramatically. Despite what you might think, that’s good news.
It’s not that savings are unimportant. Of course, they’re important, and they always will be. They are a large part of what organizations expect from procurement. But, as every CPO knows, they aren’t the only things procurement can provide.
For example, in manufacturing companies, procurement can identify suppliers who can suggest alternatives to new product designs that can accomplish the design intent more cost effectively.
(Read Full Article)
Every business faces risks - the probability of events occurring - that can or will present challenges to their operations. Risk management is the practice of using processes, methods and tools to identify the level of probability, and then manage the ensuing risks.
In practice, this means identifying in advance what can go wrong in relationships between buyer and supplier. Failing to do this means you will be under-prepared and get some unwelcome surprises.(Read Full Article)
AsiaInspection, a global provider of quality control services for businesses importing from Asia, Africa, Southern Europe, and Latin America, maintains that supply chain managers should pay more attention to risk irrespective of region.
The Hong Kong-based consultancy has just released its 2014 Q2 Barometer, a quarterly synopsis on outsourced manufacturing and quality control indicating that supply chain transparency is far from adequate nearly everywhere in the emerging markets matrix.(Read Full Article)
Welcome to the first article in a five-part series that will focus on how procurement, finance, and other professionals effectively build a “compliance management” checklist that addresses multiple avenues of spend management and the compliance ramifications behind strategic spend categories. The first four articles will highlight the dozen items that should be included in an [...](Read Full Article)
For the Dodd-Frank reporting year 2013 98% of suppliers filed with no sourcing determination. Didn't know or not telling? While we can't be certain why virtually all filers did not have meaningful sourcing declarations, we do know that supplier education & training can improve suppliers' response time and completion rates for conflict minerals due diligence.
Seven of the world's largest industry associations collaborated with Source Intelligence and Schulte Roth & Zabel LLP to launch a web-based training module within the Conflict Minerals Resource Center (CMRC). The training module is based on the best practices developed by leaders in these ...(Read Full Article)