Procurement teams typically play the central role in managing supplier risk within an organization, quarterbacking between multiple departments including legal, finance and infrastructure stakeholders. CCM’s Procurement Managed Services team typically oversees supplier risk management for its clients. Below are some examples of strategies we implement as part of our efforts:
- Conduct risk assessment: We would identify a list of suppliers that is relevant to oversee and assess, typically it is of high and medium importance. The assessment would outline potential risks and what they provide, and the strategic relationship to the business.
- Design and implementation of appropriate policies and procedures: we work with legal and compliance teams to outline simple guidelines for managing supplier risk. These policies govern assessment for supplier selection, establish category-specific risk criteria, and detail steps for the ongoing management and oversight of these relationships.
- Organize due diligence: Implement a due diligence process on potential suppliers to make sure they can meet business needs. This typically includes screening financial reports, reputation, track record, and other outlined criteria.
- Negotiating contracts: We work with legal and compliance teams to negotiate contracts with industry’s best terms and conditions that meet all client requirements and standards. These contracts typically include provisions related to risk management, monitoring, and managing the relationship.
- Monitoring performance: We recommend and implement processes for monitoring the performance of suppliers to ensure that they are meeting any business commitments.
The CCM Procurement team recommends the specific steps and, if applicable, any tools or third-party services necessary to accomplish all agreed-upon strategies. CCM then implements the strategies in tandem with our client’s internal operational teams. The end result is an organization that more effectively maintains the integrity and stability of its relationships with external suppliers and meets the needs of its internal stakeholders much more efficiently.