Supplier management enabled by risk intelligence
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This presentation looks at financial risk, reputational risk and how you can integrate risk intelligence into your supplier management. Bureau van Dijk is the leading publisher of company information and business intelligence
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Supplier management enabled by risk intelligence
- 1. Supplier management enabled by risk intelligence Ted Datta Strategic Account Director BvD UK & Ireland
- 2. What is supplier management? “The commercial business discipline that involves the pro-active, holistic, management, and monitoring, of suppliers and partners, with the primary goal of optimising efficiency and competiveness, whilst mitigating risk.” 360 Supplier View
- 3. What is risk? “The effect of uncertainty on objectives” How many European companies placed into receivership in the last two weeks? - 30,719 - 11,260 - manufacturing, construction, logistics or telecoms - 520 > 50 employees
- 4. Supplier risk management in practice “Nearly half of senior executives say their supply chain management programmes are insufficient or ineffective” Deloitte, Feb 2013
- 5. 1. Financial risk 2. Reputational risk 3. Integrating risk into supplier management
- 6. Risk: If I do this is it going to hurt?
- 7. Supply chains are vital to business performance... ...and they’re becoming increasingly complex
- 8. So where do I go to assess supplier risk?
- 9. Data from the right provider can help…
- 10. Hallmarks of good external content providers... - Global perspective - Reliability, quality and variety of content - Easy to interpret - Innovative, intuitive technology
- 11. Hallmarks of successful procurement teams… Agile StrategicInquisitive Collaborative
- 12. The world changed and it’s still changing….
- 13. 1. Financial risk: traditionally boiled down to…
- 14. 1. Lets take a wider view…
- 15. 1. And lets focus on financial strength...
- 16. 1. If we view the same supplier… John Doyle Construction
- 18. 1. Detailed insight into long-term financial stability
- 20. 2. Reputational risk: Know Your Supplier/Partner
- 21. 2. Who am I actually buying from?
- 23. 2. And who’s actually behind that company?
- 24. 3. Integrating risk into supplier management
- 25. 3. Take control of your supplier data Internal data External data Common identifier
- 26. 3. Make it part of your segmentation strategy
- 27. 3. Understand where it can add value?
- 28. 3. Enhanced evaluation and on-boarding capability
- 30. 3. Source and benchmark alternatives
- 32. 3. Deliver risk management updates to your senior leadership team
- 34. 3. Take the lead on corporate & social responsibility reporting SME Adverse Press Environmental Risk
- 35. 3. Leverage your corporate spending power
- 37. 3. Understand your impact on supplier health
- 39. 3. Dashboard environment to monitor risk intelligence on your strategic suppliers
- 41. Best practice supplier management - employs risk intelligence to: 1. Conduct robust selection, evaluation and on-boarding of key suppliers 2. Monitor, and report on, the financial health of all strategic partners 3. Mitigate reputational risk by knowing who your suppliers are 4. Capitalise on opportunities to leverage corporate spending power 5. Shape on-going business planning and relationship management strategy
- 42. Stand 12
Notes de l'éditeur
- Introduce concept of risk based approaches (e.g compliance) – PROPORTIONATERisk should be a pervasive consideration at all time during supplier life cycleNot about preventing you acting, but acting in an informed manner by fully appreciating risks involved with a supplier of partnerLots of elements of procurement risk – at BvD we’re focused on harnessing external company information to help you manage financial and reputational risk. What information is available, how can you blend it with your own data, and how do you use it to enhance your supplier relationship management?
- Mentioned earlier there’s a multitude of aspects to risk within procurement – where we focus is: 1 – Financial i.e. impact on your bottom line based on supplier health / failure and non-delivery / short-term reactionary sourcing from a weakened bargained position 2 – Reputational i.e. impact on your bottom line based on reports in the press, damages to your brand integrity and conducting business with people you shouldn’t be… And then having done that options to integrate these into existing workflow processes….We all know it can be easy to run a risk score on a supplier but then building this into the fundamentals of a process, which is repeatable, transparent and leads to tangible business results
- At point to reach out to an established provider in this area who professional collate and maintain this data content, and more importantly are on hand to help you understand itAfter all to the untrained eye many look the same – hopefully we’re not all that fatTo me one law firm…..
- Evaluation / On-boardingA snapshot summary report with gateways to do futher investigationFirst glance, we see financial health, ownership, country risk and some of your own supplier data in a simple report
- Evaluation / On-boardingA snapshot summary report with gateways to do futher investigationFirst glance, we see financial health, ownership, country risk and some of your own supplier data in a simple report
- Evaluation / On-boardingA snapshot summary report with gateways to do futher investigationFirst glance, we see financial health, ownership, country risk and some of your own supplier data in a simple report
- OK – let’s take a moment to reflectWe’ve addressed financial risk, and consider reputational risk tooBut in isolation this external data can only add real value once it’s incorporated into our on-going classification and management of suppliersSo, some familiar visuals here around the types of process that I’m sure take place to a certain extent in your orgThat point is that external can help with the classification and on-on-going management of strategic suppliers, and as we’ll see next - a number of core elements to best practice in supplier management..
- Turn your data into an Asset not a headache!If you have SRM platforms then consider how refreshers of accurate, insightful business intelligence can enhance your approach to risk management and mitigationSimilarly, at the other end of the scale, if you’ve inherited weak inconsistent data sets from M&A, ERP reporting then you need help to standardise, cleanse and then enrich some of that contentBUT – once that link is created, that headache of maintaining accurate data on those suppliers can be soothed, if not totally taken care of foreever….May have to mention matching….certain amount of process attached to creating that link but its something a good provider should be competent in and be able to offer some valuable advice on
- Classic view of portfolio segmentation, a challenge that a had recently with a client was, well we can address the supply risk piece here, and we have some idea of financial risk in terms of spend, and their importance in our supply chain… BUT – we have no understand of their stability / health which is clearly relevant to both axis…If you have a single source, critical supplier which is integral to production then understand their performace / health That point is that external can help with the classification and on-on-going management of strategic suppliers, and as we’ll see next
- So, one you’ve classified and segmented your supply chain, you have those strategic relationships which need on-going due diligence and the full rigours of best-in class in SM….It may be 5, 10, 25 or even 100 but whatever the number you’ll need to know them inside out, and stay close to them throughout the relationship with youI’m going to focus on some of the elements that BvD can support with next, which are: [CLICK] throughTo do this I’ll be pulling up some screenshots for our latest development which is already embedded into the risk management process for a number of the orgs I work with…
- Evaluation / On-boardingA snapshot summary report with gateways to do futher investigationFirst glance, we see financial health, ownership, country risk and some of your own supplier data in a simple report
- Then deeper dives into benchmarking reports, which allow you to screen alternatives vendors, and conduct wider sourcing exercises using detailed key word and industry searches
- Reporting to SLT, I’m working closely with a large TelCo where the Procurement Director and the FD run a quarterly risk board – this type of out put is integral.Who’s been downgraded in the last month – and what actions….Where’s the weakness in our Supply Chain, and what we’re doing to move this from Red to Green….
- SME / Environmental / NEWSOften secondary considerations but it’s these added value elements that can really bring supplier management to the fore within your organisPositive focus here to, good CSR stories to tell around SME performance, Environmetal scores and occassional piece of good news!
- Continuing theme of GOOD news – harness this tool can also shine a light on Rationalisation opportunities….Thinking back to that detailed ownership tree, applying that level of detail across your whole supply chain AND connecting that to your spend data can REALEASE opportunities to REDUCE supplier numbers, and ENHANCE your buying power
- FURTHER – recognising the role your business plays in the health of suppliers, here shown by the % of their turnover which is directly attributed to your spend with them can be central to overall strategy…Do you nurture critical / sole suppliers?Are you gaining fair value based on your contribution to their bottom line?
- And then finally, where can I go to harness that in one view….Where can I go to get critical management information on my strategic suppliers…Where can I see what corrective actions, alerts and reporting is being driven once we’ve linked out supplier data with external content?And how can I control spending patterns across other depts. for non-approved suppliers…This Dashboard can help you create a world suitable for every level of the supplier chain to adopt a risk based approach to supplier manaegeent
- So to sum upIt’s big challenge, you may be fighting fires with no data to inform decision making – so for you it’s harnessing internal supplier data first, before thinking about external providers.That in itself will be a big leap forward in supplier management…BUT if we’re striving for best-in-class then it’s understanding:what the right content is, who the key are suppliers and what is most effective technology so your procurement function can…. (CLICK)Thanks for your time and do come and find out more about us on stand 12