Risk Management: Preparation and Mitigation
The Covid-19 outbreak caused a wide range of supplier management and risk challenges for Procurement, sometimes leading to the reshaping of category plans and strategies during 2020.
What lessons have been learnt? Which strategies and tactics should Procurement employ to effectively manage risk as we head into 2021?
In this three-part series, we present the thoughts from our specialist team of analysts and facilitators who kindly imparted their knowledge and category expertise. We kick-off with Karina Harris, who presents her top tips and insights.
During these uncertain times, the most significant discussions among procurement professionals have related to the success factors required to meet stakeholder and supplier expectations. What are leading companies doing differently? How can we, as Procurement, take what we have learnt and contribute to the long-term strategies? Here are my top strategies and tactics for an effective 2021:
1. Make business strategy and stakeholders’ needs central to your delivery plans
With the focus on modern slavery legislation, lessons learnt from disrupted supply, and the commercial bottom line, the chances are high that Procurement now has a voice into the senior levels of the organisation. Ensuring that you have great stories to tell which align with the business strategy and stakeholders’ requirements will help to maintain that seat and continue to make a difference. The entire team should be focused on the strategy and stakeholder requirements in order to provide relevance.
2. Be the customer of choice – you need the right suppliers and relationship to ensure the necessary products and services are secured going forward
Being a customer of choice means that your relationship with your suppliers within your supplier base is critical, and thus should be one of collaboration and respect. As the competition for products and services grows, particularly for social and sustainable streams, so will your competition for these sectors. As the consumer begins to become more mobile and discerning, then the entire offer - your product origins, company brand, its community and environmental impacts, as well as business delivery, become your true differentiators. The fashion industry is already feeling these pressures from the consumer base. Get these differentiators right and the suppliers will deliver for you and them together.
3. Implement technology that can standardise and measure processes
There are numerous solutions on the market today that can bring you end-to-end solutions. Don’t reinvent the wheel. Try to buy off-the-shelf – make a smart choice on the tech you choose. Whether you are implementing to reduce risk, save time, save resources or invested toward bringing in new rich data, remember you are investing in a solution that brings increased governance and value-adding activities to the business delivery.
4. People and teams make the difference
Walk in the shoes of your teams, stakeholders and suppliers – consider their perspective. Invest the time to talk and communicate across your business. Do this often and really listen. Be guided by what is important to others and this will move you in the right direction. This may require a change in direction or a new approach to a category in response to external markets. Don’t be afraid to be ambitious; however, do establish milestones that contribute to the business strategy, supplemented by reporting that will deliver against near- and mid-term milestones.
Procurement sits in a unique position, typically with monetary contribution targets, and contributes to value-add solutions by partnering with suppliers. Don’t waste this opportunity to transform how you do business. Excite those around you by informing and sharing your insights learnt during 2020. Your teams are empowered and resilient; use this to power into 2021.
Karina Harris is a CASME RoundTable facilitator based in Melbourne, Australia.
In Part 2, we present key insights regarding specific regions and categories such as business travel and marketing.