CFO Magazine and Supply Chain Risk

This morning, I'd like to welcome back a regular guest columnist to Spend Matters. Brian Sommer is a Senior Fellow at Azul Partners, founder of Tech Ventive, and is author of the blog Services Safari. Supply chain risk has been a major topic of discussion that Brian and I have been debating recently.

CFO Magazine had a nice long piece in the April 2006 issue titled "Coming Distractions". It identified several business risks business executives should have on their radar screen if they aren’t already on there now.

CPOs should look this article over as each risk has specific implications for buyers and suppliers of acquired products. Briefly, some of these risks include:

- Green Laws – Are your suppliers ready to accept returns of their products after they've reached the end of their useful life within your firm?

- Terrorism Insurance

- Foreign Corrupt Practices Act -- The more global your supply chain gets are you sure everything is copasetic globally?

- Contingent Liability Accounting -- Can you predict future recall and warranty costs your firm will incur because of potential supply problems in the parts you are buying today?

- Electronic Records Retention -- How much information do you need to retain regarding your reverse auctions, product quality/return issues, etc.?

- Pricing Strategies -- Could any of your actions (or those of a supplier) be perceived as predatory?

Procurement isn't a clerk's job anymore. It requires an executive with a keen insight into many risk areas and opportunities. Is your organization up to today's challenges?

Brian Sommer authors the blog: Services Safari.

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