Category Archives: Supply Risk
On Sunday, Indianapolis will rev up for The Indianapolis 500, which is the world’s most famous and prestigious auto race. “The Greatest Spectacle in Racing” covers 500 miles (200 laps) on the 2.5 mile oval track. So what can purchasing pros learn from the Indy 500? The Indianapolis 500 isn’t won in one lap – and an auction isn’t won based on price only. Price is certainly an important factor when choosing the right supplier for your business needs, but … More
Welcome back! Just joining in? Click here to read Part 1. As many of you know, providing a high level of influence and performance in non-traditional spend categories will require subject matter expertise and skills beyond traditional negotiating skills such as: Strategic thinking and analysis Project / program management Data analysis and modeling Change management and Influencing skills Problem solving Relationship management All of the above business skills are key for sourcing professionals to learn and adopt. While these non-traditional … More
Welcome back! If you’re just joining us for this two part series, click here to read Part 1. All companies have a minimum of two levels (tiers) of suppliers – Tier One (directly contracted suppliers) or Tier Two (suppliers to the Tier One suppliers). Large companies do a fairly good job of assessing their risk exposure to Tier One suppliers during the initial assessment and contracting process. Usually, little if any review of Tier Two suppliers occurs at this stage. … More
Global supply chains are constantly exposed to risk, ranging from disruptions of continuity to various levels of operational destruction. Risks can include weather, significant cost variances, resource availability, legislative/tax changes, logistical disruption, power outages and health epidemics, and usually occur without warning. Most supply chain management functions, even in the most advanced companies, are ill-equipped to address the wide range of risks they’re exposed to. Whether company is a manufacturer of raw materials, finished goods or a supplier of services, … More
In Part One, I introduced a discussion of some surprising trends I found when looking at supplier registration forms from a wide variety of companies across many industries. The first surprise for me was that so many of these companies are asking the same questions from supplier companies. In this post I’ll discuss the other unusual thing I discovered: some organizations ask potential suppliers essay questions. It’s not quite as open as the classic American “How I Spent My Summer … More
This is the fourth post in our 10 part series. Click here to read Part 1, Part 2 and Part 3. Investing in capabilities to support basic supplier management activities is Spend Matter’s fourth idea to enhance procurement’s value across the organization. During the Webcast, Jason Busch presented a few key supplier management activities including: Supplier on-boarding (i.e., the need to efficiently electronically enable suppliers for eProcurement and invoicing) Supplier portals (i.e., basic portal capability designed to capture supplier information … More
In Part 2, I ended my blog post with: The basis of price risk management therefore lies in asking the following questions: What is the “right” level of price cover and how do we determine what this level should be (particularly if we do not enjoy market information advantage)? What are the cost/benefits of derivatives over inventories? What is the difference between hedging and trading? How can we ensure our corporate objectives are aligned to our price risk management program? … More
