Risk Content

Monitor Group Goes Bankrupt: Why Services Procurement and Risk Management Best Practices Matter [PRO]

Did you know Michael Porter had an unpublished sixth force – bankruptcy? While we say this in jest, the recently announced bankruptcy of the consultancy that he founded, Monitor Group, is no laughing matter. At the time of the filing, Monitor had approximately 1,500 employees, making it smaller than some of its peers in the top-tier strategy consultancy league (including Bain, BCG and McKinsey), but still a highly influential firm on the global management consulting stage due to the senior relationships that it had.

Ariba, SAP, OB10, IBX, Hubwoo and Basware: Are Supplier Networks Addressing Supplier Risk, Performance and Compliance? [PRO]

Even in just providing basic infrastructure plumbing, supplier networks can provide significant value in areas like supplier enablement, catalog management and electronic invoicing. Moreover, networks can help organizations save time and money not only through avoiding manual steps and touch points (e.g., when on-boarding new suppliers as part of an AP/procurement eProcurement and payment initiative) but by leveraging a many-to-many approach in which suppliers only need to update basic information such as banking details, contact information, etc. in a single place (i.e., the network) which is then broadcast to all participating customers using it on the buy-side.

The Genesis of a Firestorm – Managing Risk and Value in the Supply Base (Part 2) [Plus+]

To manage the complexities of the brave new supply chain, few things are more important than more and better data, as well as improved tools to analyze and manage the data points. Much is happening on both fronts – recent developments around unique exposure to commodity shortages (helium, earth metals) and regulations (Dodd-Frank; tin and other metals) in multi-tier supply chains coupled with the qualitative risks (social media, sustainability) and all the traditional risks have come together around driving new solutions and processes.

GRC and Supplier Management: Clearing up the Confusion [PRO]

The ability to address “risk” in all its multi-faceted glory is found in so many tools. Within procurement, we can address it in spend analytics, sourcing, vendor selection, ongoing supplier development management, contracts – including content and management process, policies, performance management, audits, CRM, regulations, product content, multi-tier and other third party content, and much more. We don’t see GRC solutions (and the types of people typically managing them) as capable of addressing this spectrum for procurement, at least not at this level.

The Genesis of a Firestorm – Managing Risk and Value in the Supply Base (Part 1) [Plus+]

The other week I attended the Managing Risk & Value forum held in Atlanta. Participants came from a range of firms – Brauer Aerospace & Defense, CP Kelco, DuPont, HD Supply, Home Depot and many others. The event was organized by Firestorm and Genesis, with the most famous draw being John Campi, currently Managing Partner at Genesis, formerly SVP Sourcing and Vendor Management at Home Depot, prior to this CPO at Chrysler, CPO at DuPont, and a series of procurement positions with other household names.

Deadly Meningitis Outbreak – Time to Roll Out a Product Serialization Solution for Pharmacy Compounding Centers? [Plus+]

Fungal meningitis – or any form of meningitis – is deadly serious. According to yesterday’s Wall Street Journal, 91 people are currently known to have contracted the illness and at least seven have died from it. The tainted products can allegedly be traced back to New England Compounding Center based in Framingham, Mass, which is one of around 3,000 compounding pharmacies in the US, comprising a mere 3% of the annual US prescription drug market. This tragedy is likely going to be used by the FDA in their efforts to assert themselves over this industry, which is currently regulated chiefly at the state level. The compounding pharmacies are a growing segment as hospitals are increasingly outsourcing this kind of work.

Six Key Supply Risk Analysis Tips and Lessons from TradingPartners’ Bankruptcy [PRO]

The closing of any business may make for good news headlines. But it’s a sad affair. When it’s people-driven, this is even more the case. For example, when managers and employees put in years of work only to have their efforts amount to selling off swanky office furniture to pay pennies on the dollar of supplier claims, no one should smile (not even competitors; it could happen to them). There’s really no good that comes of it, except, perhaps, for customers who can find more stable partners in the process (provided they saw the writing on the wall and moved quickly enough to transition their requirements).

Can Supplier Management Be Saved? The Problems With SIM, SRM and Risk Management (Part 2) [PRO]

Consider how initiatives such as supplier risk, supplier diversity and supplier development tie together and should not be treated as separate. In the case of recession and/or restricted bank lending, smaller suppliers are likely to be hardest hit and can also create greater supply risk. By making the case for all three of these initiatives together, procurement leaders can close the loop to drive better outcomes rather than just silo-based investment.

Can Supplier Management Be Saved? The Problems With SIM, SRM and Risk Management (Part 1) [PRO]

Supplier management has problems. Some might call them large problems. Whether you call it simply “supplier management,” supplier lifecycle management, supplier information management (SIM), supplier relationship management (SRM) or supply risk management doesn’t really matter. But what does matter is a relatively consistent set of challenges we observe that companies are having in building programs that can sustain themselves over time to go beyond a single (or handful) of highly specialized initiatives and programs.

Cortera – Looking at Supply Chain Risk Through the A/R Lens [PRO]

Cortera’s approach to assessing risk is built around the insights we can draw from an accounts receivables picture of a company, as assembled from its suppliers. The primary benefit of this picture is that it draws on data from a multitude of companies, and does not rely on any company self-reporting on its financials. This avoids the problem in pursuing GAAP data, which is hard to get from privately held firms and can be open to interpretation (and even manipulation). Instead, Cortera builds an aggregated A/R picture which tells a fairly straightforward story about what a company buys, from whom, and how quickly they pay their bills – and the trends and changes in these data points over time.

How should CPOs react to economic turbulence? [Plus+]

The problem for the CPO looking at the future is that these options all have a reasonable likelihood in Europe right now, but could mean very different economic outcomes. And that in turn means different consequences for the issues that are of interest to procurement executives and their organisations. Which way are commodity prices going to go? And currencies? Will the Euro survive? What are the implications for existing contracts if it falls apart? Where are the biggest supply chain risks if the worst does happen?