The Chartered Institute of Procurement & Supply (CIPS) has launched a free online tool to support procurement and supply management professionals and those with an interest in buying to develop resilience in their own supply chains.
A CIPS survey in 2016 of 900 professionals revealed a growing awareness that unmitigated risk can have disastrous consequences for companies in terms of revenue and impact on margins.
Of those surveyed, 46% ‘sometimes’ have mitigation strategies in place and yet 52% expected the same level of service from their suppliers in the event of a disruption.
The Risk and Resilience Online Assessment Tool helps procurement professionals to identify where specific risk exists in their supply chains in seven key areas:
- Geographical. Restrictions on commodities or trade tariffs can have devastating effects on supply chains along with environmental concerns and reputational damage.
- Functional. Poorly conceived strategies and poor systems controls can make critical parts of the supply chain high risk.
- Performance. Suppliers may be engaging in bad working practices or failing to provide the right product, at the right time, to the right place.
- Technical. An inadequate level of internal security surrounding IT systems could lead to cyber risk and loss of customer, or partner data and loss of revenue.
- Governmental. Actions from governments could influence the movement of goods, with sanctions and embargoes and could affect reputation if found to be supportive of human rights abuses.
- Ethical. Dents in customer confidence will affect revenue streams and reputation, disaffected workforces can produced delayed, poor-quality goods.
- Legal. Breach of laws and statutes will cause delays and issues in supply chains. Diligence is required to ensure suppliers and contractors are also compliant.