Teaming up for ISM's Risk Track — Making Sense of Supply-Risk Solutions

Supply risk is a hot topic. More than a passing phase, it seems to be gaining traction. Supplier bankruptcies, sub-tier supplier glitches, volatility in commodities, political unrest, natural disasters, transportation glitches have companies worrying about the next failure. The buzz has been reaching a fever pitch as numerous supply-risk solutions providers continue to jump into the fray. In many firms, whether and how you address supply risk depends on the awareness and support of senior management, the organization’s current hot buttons, the potential risks a company is conscious of, whether the company has specific business processes in place to manage risk, and whether multiple functions in addition to purchasing are involved. Despite the buzz, few companies have a good understanding of the third-party tools and content available to help them systematically monitor, manage, and respond to risk within their supply base. Supply-risk management and supply-risk solutions are still an emerging market. Many companies know they should be doing something about supply risk, but are confused by the many available options.

Supply-risk solutions address supply risk from many different angles, but not always all angles: financial risk (is this supplier about to go out of business?); supplier information (all information about a supplier in one place, a starting point for risk-related information); supplier risks (supply chain disruptions, costs, legal issues); a supplier-relationship management focus (engaging with suppliers increases knowledge and lowers risk); compliance (ensuring compliance to quality, safety, regulatory, or insurance requirements); supplier performance (understanding performance reduces risk) -- the list goes on. Many firms are unsure which solutions fit their company’s level of sophistication and their unique supply-risk profile. Also, many firms want to understand how these solutions fit into other procurement technologies they are currently using. Another challenge is having the resources and the contingency and mitigation plans in place to take action when problems are highlighted by these solutions.

Jason Busch and I plan to address these issues in our session, "Understanding and Choosing Supply Risk Solutions: Software, Content, and Analytics" that we’ll be presenting at the 2010 ISM Annual Conference in San Diego this spring (specifically on Wednesday, April 28 from 9:00 to 10:00 a.m.). Because of its importance and the level of interest, supply risk has merited a whole track at next year's ISM conference. Jason and I will aim to shed some light on the topic in a useful, interesting, and practical way. We hope you can join us in April. And in the meantime, stay tuned on both my blog and Spend Matters for continued examination of the technologies and content powering the future supply risk solutions.

Sherry Gordon

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