Prevent Supply Chain Disruptions and

Protect Your Brand

Supply chain disruption can cause irreparable harm to brand and drive customers
straight to the door of the competitors.
Till very recent years supply risk management was all about conducting financial review
at regular interval, but as supply chains become increasingly global and ownership
moves further and further from the manufacturer, companies have realized that financial
health is not a real indicator. Risk factors are also along operational, managerial, and
geographical aspects, hence understanding supply risk requires much more than
evaluating suppliers financial conditions.
What is Supply Chain Risk Management?
Supply Chain Risk Management is implementation of strategies to manage risks along
the supply chain based on continuous risk assessment with the objective of reducing
vulnerability and ensuring continuity. Vulnerabilities can be reduced by adopting
coordinated holistic approach involving all supply chain stakeholders and by identifying
and analyzing all risk of failure points.
EmpoweringCPO leverages its proprietary framework and methodology to mitigate risk.
The process starts with creation of category positioning matrix. High risk categories and
suppliers identified in Bottleneck and Strategic quadrant are further analyzed to
determine answers to the following questions:
1) What need does this supplier fulfill?
2) How critical is this supplier to the overall operations?
3) How is this supplier relevant in terms of achieving supplier diversity and
sustainability goals?
4) How would we handle if we were to lose this supplier?
In addition to financial analysis and research, to ascertain stability of current supplier
base other factors are also analyzed:
1) Changes in Suppliers management team
2) Any violations related to environment laws, trade sanctions, occupational safety
and health regulations etc.
3) Noticeable lags in response to inquiries
Each category is analyzed on 2x2 matrix of Risk Impactversus Risk Occurrence, for each
quadrant the strategy proposed is different. Thorough research is also conducted to
identify pool of suppliers so as to mitigate risk and prepare list of suppliers as a standby.
The high level strategy for each quadrant is presented as below:
1) Low Occurrence High Impact:
a. Implement joint process improvements with suppliers,
b. Have emergency plans
c. Buy contingent business interruption insurance

2) High Occurrence High Impact:

a. Begin resourcing efforts on these SKUs
b. Redesign product or find new suppliers
3) Low Occurrence - Low Impact:
a. Review and improve quality assurance process
4) High Occurrence, Low Impact:
a. Monitor supplier performance
EmpoweringCPO Capabilities:
The key ingredients required to design and successfully implement Supply Risk
Management strategy is to conduct research for the relevant categories and suppliers on
an ongoing basis, we have qualified team of research analyst to perform this very critical
role and ensure disruptions are prevented.
Background Information about EmpoweringCPO:
Procurement is about securing the inputs such as materials, supplies, equipment and
services to a business. According to Michael Eugene Porter in his book Competitive
Strategy, procurement is an important aspect to remaining competitive and effective; so
why outsource the procurement service? Surely by outsourcing the procurement service
a business is putting at arms length its buying capability in favor of cost related benefits,
whilst reducing the opportunity for intuitive and innovative buying, which may omit
value, innovation and competitive advantage.
We at EmpoweringCPO understand this aspect and hence our services and delivery
model are structured so as to strengthen the existing onsite procurement team of our
clients and also help achieve competitiveness at the same time. To ensure that the goal
of total cost reduction is achieved we support them with highly qualified resources at
competitive pricing through our offsite delivery model.
EmpoweringCPO is a Procurement and Sourcing Advisory Firm; our services are
delivered using proven Knowledge Process Outsourcing (KPO) model with delivery
centers located in India.
Our main offering is to support procurement organizations with market intelligence and
analytical rigor so as to help achieve higher strategic sourcing project savings and
support category management on an ongoing basis. Our services include - Procurement
Intelligence, Procurement Analytics, Spend Analysis, Strategic Sourcing, Low Cost
Country Sourcing, Compliance Management and Supply Chain Risk Management.
For more information about our Supply Chain Risk Management frameworks
and methodologies, reach out to us at info@empoweringcpo.com
Original Article Source:- Scribd.com