Tag: Supplier Risk Management

supplier performance management

Improving Supplier Segmentation for an Industrial Machinery Manufacturer by Conducting Supplier Risk Analysis

Companies of today are exposed to ever-growing counterparty risks. It is, therefore, recommended to evaluate supplier risk continuously to minimize disruption in the production process. Also, to maintain a competitive advantage, manufacturers must improve their supplier risk analysis process.

The Business Problem

The client is a leading industrial machinery manufacturer in the US who engages with approximately 100,00 suppliers in over 35 countries worldwide. Despite having different audit programs in place for a few suppliers, the US and foreign supplier concerns and distribution disruptions were impacting the growth of the client. Poor supplier segmentation and rising overhead audit costs were further forcing the client to adopt best-in-class supplier risk analysis methods. The client, therefore, approached SpendEdge to leverage their expertise in offering supplier risk analysis solution. By adopting SpendEdge’s supplier risk analysis methods, the industrial machinery manufacturer wanted to overcome shortcomings on the part of suppliers that were exposing them to a variety of risks.  

Segregating suppliers based on the risk they pose is crucial for organizations to mitigate risks. Request a free proposal and access our complete portfolio of supplier risk management solutions.

Solutions Offered and Client Journey

The experts at SpendEdge conducted a comprehensive supplier risk analysis to integrate supplier information across operational systems. They effectively consolidated supplier data across the organization to provide real-time information on suppliers and improve visibility for informed supplier risk management. This facilitated a smooth workflow for the client across different departments and business units, offering clear insights into risk factors, apart from implementing actionable supplier risk analysis techniques.

The experts also utilized due diligence data from different internal and external sources to identify suppliers that were important for the organization but posed the highest level of risk. They assigned risk categories based on supplier segmentation and provided detailed insights regarding suppliers that were likely to disrupt operations impacting the supply chain.  Such risk analysis methods enabled the client to engage with suppliers and develop effective contingency plans while predicting supplier failure. In addition, the suggested risk analysis methods helped the client to plan ahead for potential disruptions from critical suppliers by engaging with suppliers who were already vetted and approved.  

Wondering how you can conduct effective supplier risk analysis?

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Key Findings and Outcome

Improved supplier segmentation

The solution offered helped the client to segment their suppliers based on each supplier’s risk profile. This allowed them to plan and prioritize supplier audits more efficiently and reduce the number of audits performed. In addition, the supplier risk management solution helped the client to calculate the risk profile of each supplier based on audit ratings, supplier self-assessments, and other such factors

Enabled supplier rationalization

The supplier risk analysis methods helped the client to gain better visibility into supplier capabilities, maturity, and risks levels. This provided them a comprehensive understanding of where suppliers need to improve their internal processes and scale up operations. For detailed insights on the complete list of solutions delivered, request for more information.

How to Improve the Supplier Risk Analysis Process?

According to SpendEdge, following these six supplier risk analysis methods can help companies to improve their supplier risk management process.

  • Identify active suppliers, analyze the spend, and cleanse the data to develop a comprehensive overview of the supply base.
  • Figure out suppliers posing the highest level of risk who can disrupt ongoing operations.
  • Collect supplier data from different sources and gain a better understanding of risks.
  • Analyze the data to predict risks in the context of business activities and the impact they can drive.
  • Implement risk analysis techniques to address risk more quickly, efficiently and effectively.

Want to about common supplier risk analysis methods that can prove beneficial for your business? Get in touch with our experts now!

Construction industry

A Step-by-Step Guide for Effective Supplier Risk Management

With the rise in globalization over the last few decades, supplier risk has increased substantially. Companies of today are tasked with coordinating global strategies for meeting regulatory requirements, assessing risks, and mitigating them – all while maintaining the optimal productivity levelsThe problem increases manifolds in the complex global marketplace. Today, supply chain managers deal with numerable financial risks, which range from stockholder profits to compliance issues. A failure to improve supplier risk management can result in significant monetary losses for the company such as reputational damage, regulatory penalties, and production delays.

At SpendEdge, we understand the importance of supplier risk management for the smooth functioning of businesses. Therefore, in this blog, we are highlighting the step-by-step process that can lead to better supplier risk management.

Establishing a supplier risk management system is imperative for companies to mitigate risks. Request a free demo and know how you can build an effective supplier risk management system for your company.

How to Manage Supplier Risk?

Step 1: Certify

Selecting a supplier is not easy and comes with its own set of challenges. A strong supplier risk management process mitigates that risk by incorporating values into the current metrics and ensuring that suppliers associating with the company are able to meet their deadlines on time. It basically requires you to practice these functionalities in supplier risk management:

  • Gaining expertise about the marketplace.
  • Asking the precise questions in the RFP process during the bid.
  • Verifying the information provided by suppliers against a third-party source.
  • Centralizing information for established suppliers.
  • Repeat the information to keep it updated.

Step 2: Monitor

Not every supplier holds equal value for your business. Strategically identify suppliers who are important for your supply chain and those who can cause disruption in the manufacturing line or services. Evaluating suppliers strategically and critically will help you determine the types of risk levers that can affect suppliers or the supply base. This supplier risk management process will require you to:

  • Determine the sources of information that needs to be monitored.
  • Establish a supplier risk management framework that can monitor external and internal in real-time.

Want to know how you can strategically identify suppliers and reduce chances of supply chain disruptions?

Request a free proposal to access our complete portfolio of supplier risk management solutions here!

Step 3: Analyze

Implement technologies to reduce the amount of time and effort required to analyze and create reports that can increase visibility and provide actionable intelligence. Areas to analyze can include financial risk, supplier performance, or spend category depending upon the profile of your company.

By repeating the supplier risk management process over regular intervals, you will gain a better understanding of how your supplier performs and what are the acceptable behavior thresholds. The points you should be addressing while analyzing are:

  • The performance of your organization.
  • The supplier’s performance against service level.

Step 4: Mitigate

Since predicting a suppliers failure with complete accuracy can be a difficult task, you can always compensate for the same by planning for it. Proactively prepare for these potentially damaging supplier disruptions with the supplier risk management in place. Also, developing a supplier risk assessment process, building contingency plans by documenting competitive suppliers can help improvise plans according to the updated information.


Wondering how supplier risk management can help your organization? Get in touch with our experts today!

IR33

Six Effective Ways to Build Better Supplier Relationship Management

What is supplier management process? 

Most organization rely on third-party vendors or suppliers for the purchase of goods and services. Therefore, how an organization engages, manages, and communicates with their suppliers and builds supplier relationships is critical to their overall success. Supplier relationship management refers to the process systematic assessment of the suppliers’ assets and capabilities in view of the organizations overall business strategy. This determines activities to engage in with different suppliers, and planning and executing of all interactions with suppliers to maximize the value realized through those interactions. Supplier relationship management seeks to develop a two-way, mutually beneficial relationships with the strategic supply partners of a company. Supplier relationship management helps build better supplier relationships and thereby achieve greater levels of innovation and competitive advantage than could be achieved by operating independently or through a traditional, transactional purchasing arrangement.

Supplier management strategy and solutions for business

The strategic approach to supplier relationship management has always been critical for businesses that rely on third-party suppliers. For businesses that strive to succeed in the market, having trusted relationships with dedicated suppliers should be one of the primary goals. In this blog post, we are going to take a closer look at some of the key supplier relationship management strategy that will help you improve relationships with suppliers and streamline your supplier relationship management framework:

Suppliers are not just vendors

For a smooth supplier relationship management, businesses must consider their suppliers as their partners. This partnership should be based not only on financial transactions but also on mutual trust and loyalty between both parties. Suppliers should be made to feel like they are a part of the business. They must be informed about your processes, such as product launch and promotions. It is also essential to listen to their concerns or grievances. 

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Developing a Sound Risk Management Process in Five Simple Steps

What is risk management? 

Risk management framework involves steps that help organizations identify potential risks, analyze them, and take corrective actions to eliminate or reduce the magnitude of the risk. For most of the digitized companies, IT security threats, data-related risks, and the risk management strategies to alleviate them have become the top priority.

Risk management process consists of steps that are implemented to minimize the adverse effects of accidental business losses on an organization. There are five key steps involved in an ideal risk management process. Read on to find out the steps involved in an ideal risk management framework.

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IR34

Customs Brokerage Market – A 360° Market Overview

Customs brokerage firms make the international trade possible by facilitating the shipment and delivery of goods across international borders. The agency has to take care of shipments which occur in a sheer volume across international borders every single day. Each country has a different set of rules and regulations regarding customs, import, and export. Additionally, laws and regulations regarding customs are changing constantly, making it impossible for a normal person to do business across international borders. The customs broker facilitates this transaction as they are responsible for knowing all the rules and regulations. The broker will facilitate and streamline the shipping process for the individual or the organization.

Request Free SampleMarket growth

The customs brokerage market is on track for a steady growth of 8.5% per annum. Buyers, especially in North America and Europe, are collaborating with regional suppliers for strategic sourcing and supply chain management. Collaboration with regional suppliers has enabled buyers to reduce their TCO for customs brokerage and helped them realize cost savings between 5% and 7%. Although global firms can offer a wide range of customs brokerage services, it is their inability to offer assured savings that is swinging the market in favor of regional suppliers.

Market pricing

Although the demand for customs brokerage services is rapidly on the rise, the prices are only set to marginally increase over time. The market for such services is highly fragmented, resulting in high level of competition which is expected to keep the prices stable. The growth of the manufacturing industry has alerted service providers to offer their services for increased global trade. This will bring in added revenues to such service providers.

Pricing model

The brokers can charge their clients either an hourly rate, a fixed fee, or fee-based on services provided. However, both buyers and sellers are hesitant to deal on a fixed fee. They prefer to deal on an hourly rate basis, which bills customers on the basis of time involved for the advice and solutions on processing the shipment. It also provides the buyer with finer control over the expenses associated with customs clearance.

Cost-saving levers

Reducing the total lifecycle or ownership cost is one of the most effective cost-saving levers in this market. Reducing the TCO associated with customs clearance process by focusing on R&D to come up with technological innovations can help suppliers increase their process efficiencies, reduce overall costs, achieve increased economies of scale, and transfer these savings to buyers.

Market innovation

Suppliers for long had been working on technology to detect defects in shipment. These technologies include smart seals and trafficking sensors that alert suppliers in case if a seal of a cargo item is tampered and help to locate the shipment before it reaches a customs official. A supplier based in California is utilizing a smartphone app that connects shippers and carriers. The app allows containers from multiple shippers to be grouped at the ports before alerting different carriers on when containers are available and where they should be taken.

 

Read more about the market outlook of the customs brokerage market along with procurement best practices, pricing insights, supply market insights, and market innovations in SpendEdge’s upcoming report on the global customs brokerage market.

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IR30

Supplier Risk Analysis Helps a Renowned Gluten-free Foods Producer Reduce Potential Risks by 20%

Overview of the Food Industry

A gluten free eating regimen is medically acclaimed for patients experiencing celiac diseases, for individuals suffering from inflammatory diseases, and auto immune diseases. The growth of the gluten free foods market can be attributed to the rising concern for health coupled with the increasing instances of gluten sensitivity among the populace. Moreover, the medical benefits associated with gluten free products are compelling prominent organizations to maintain sustainability in their product offerings. The relentless growth of innovations is also compelling prominent businesses to retain the price, quality, and service for the products to meet the rising demands of the target audience.

Here are some of the factors that may influence the growth of the industry over the years:

  • Nutrient deficiencies: Gluten free foods might not contain the necessary nutrients that are found in food products that contain gluten. This situation can lead to nutrition deficiencies, where it becomes essential for organizations to include vitamins such as calcium, iron, B vitamins, vitamin D, and fiber into their product offerings to ensure minimal nutrient requirements. Moreover, organizations will also face intense pressure to re-define their product offerings to meet the global demand for fiber-rich
  • High risk of cross-contamination: While the majority of the people in the household shift toward gluten free foods owing to its health benefits, it’s not necessary for everyone to follow a gluten free The preparation of both gluten free and gluten products in the same colanders, toasters, and condiment containers can result in cross-contamination. So, it becomes essential for organizations to thoroughly maintain their wash counters to ensure that there are fewer chances of the food being contaminated.

To counter such challenges and mitigate potential risks in the supply chain, organizations are leveraging risk analysis solutions. A risk analysis solution helps businesses identify, assess, and mitigate risks to reduce vulnerability and ensure continuity. The risk analysis solution also helps businesses revisit their risk models and devise robust risk mitigation strategies to curtail potential risks.request free proposal

The Business Challenge and the Journey

The client, a renowned gluten free foods producer, wanted to evaluate each supplier and understand the typical risks associated with the key suppliers. Moreover, by gaining insights on the industry best practices, the client wanted to identify the impact of the risks on the supply of new products and services. The gluten free foods producer also wanted to identify the risk mitigation strategies to curtail supply chain disruptions. The primary concern of the client was to reduce risks to successfully deliver products to the end-users.

To understand the current landscape, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with leading stakeholders in the gluten free foods space. To determine the supplier’s health, the experts also compiled information from a wide array of reliable sources such as trade shows, newsletters, and magazines.

The risk analysis solution offered by SpendEdge helped the gluten free foods producer identify the macro and micro-economic risks and the regulatory environment. The solution also helped the client develop a financial restructuring plan to adequately allocate their resources to meet the business requirements.

Fundamental questions answered in this risk analysis include:

Sp- supplier risk analysis


The Results

The solution offered by SpendEdge assisted the gluten free foods producer to gain comprehensive insights into the currency and interest rate risks in the industry. With the help of the risk analysis solution, the client was further able to profile the right suppliers to prevent supply disruptions. Moreover, the gluten free foods producer was able to streamline their marketing efforts to improve the return on investment.

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SpendEdge’s Supplier Profiling Helps a Renowned Auto Manufacturer Analyze their Supplier Performance

Overview of the Automotive Industry

In Europe, the automotive industry accounts for 12 million jobs; 8 million jobs in the US and more than 5 million jobs in Japan.

Following the recent economic crisis, the global automotive industry is in a challenging phase with the presence of numerous OEM players offering a considerable number of product offerings. The growth of the industry can be attributed to factors such as the rise of per capita income, global consumer spending, and finance rates. Moreover, the industry is vulnerable to economic shifts with the driving demand for automobile sales in the next five years. As sales shift to continue and environment regulations tighten, leading auto manufacturers are planning to deploy appropriate investments and resources to enhance their business objectives.

Here are some prominent factors that may influence the growth of the industry:

  • Complexity and cost pressure: With the stringent regulatory pressures, leading auto manufacturers are planning to invest highly in research and development to offer reliable solutions to the customers. Moreover, with the growing concern for carbon emissions, businesses are planning to offer reliable solutions to better match the demands of the customers.
  • Digital demands: The present consumers are more connected and are focusing on ease of use in their product offerings. With the relatively growing demand for convenience in their product offerings, prominent organizations are planning to leverage the use of digital resources to increase their product portfolios.

To counter these challenges and meet the supply-demand relationships of the customers, leading organizations are leveraging supplier profiling solutions.request free proposal

The Business Challenge and Our Journey

The client, a prominent auto manufacturer with a considerable number of manufacturing units, spread globally, wanted to reduce procurement and excess inventory costs and deliver quality in the products offered. With the growing supply-demand gap, the client wanted to leverage the use of supplier profiling to reduce the time span for the products and improve the supply chain efficiency. The primary objective of the client was to identify the right supplier from a pool of suppliers and improve the quality of products offered while enhancing economic opportunities. Moreover, the supplier profiling analysis also aims at engaging with the best suppliers and comparing the business efficiency with their competitors.

To profile the most suitable suppliers in the auto manufacturers space, SpendEdge’s supplier profiling experts carried out an extensive research methodology comprising interviews and discussions with prominent stakeholders in the auto manufacturers space. To streamline their supply chain efficiency, the experts also compiled information across a wide array of reliable sources such as paid industry databases, trade shows, and company presentations in auto manufacturers space.

The supplier profiling solution offered by Infiniti helped the prominent auto manufacturer identify and develop a long list of suppliers in terms of their efficiency and revenue. Moreover, through a reliable solution, the client was able to efficiently manage and control their maverick spend and measure and optimize their supplier performance. The supplier profiling solutions also sought ways for the auto manufacturer to segment suppliers based on spend and criticality and evaluate the suppliers in terms of their potential risks.

Fundamental questions answered in this supplier profiling solutions Include:

Supplier profiling


The Results

During the course of the engagement, the supplier profiling solution helped the prominent client develop a SWOT analysis and manage supplier activities based on the criticality of the sourcing complexity. The solution also helped the client gain a performance perspective on various factors ranging from the price, quality, delivery, and management.


To know more about our supplier profiling solutions in the auto manufacturers space

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IR3

Top 5 Mining Equipment Manufacturers Across the Globe

Working in the mining industry can be a dangerous and challenging task due to extreme working conditions and multiple emergency situations. Extracting resources from the Earth is a laborious task and requires heavy mining equipment that can perform the toughest of tasks. There are various categories and types of mining equipment including dozers, loaders, trucks, drillers, crushers, dryers, feeders, conveyor belts, hydraulic pumps, and compressors. Each kind of mining equipment is used in its own set of mining activity and differs in the function they perform. Although the mining industry has been functioning all the same since its inception, the recent incorporation of digital technologies has substantially enhanced the productivity of the mining equipment. The procurement market intelligence report form SpendEdge also indicates that the category spend will be driven by rising mining activities in the APAC region.

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Komatsu

Komatsu is a Japanese multinational corporation involved in the manufacturing of construction, mining, and military equipment. The company also manufactures industrial equipment like press machines, lasers, and thermoelectric generators. Their construction and mining equipment consists of machines including electric rope shovels, continuous miners, hydraulic excavators, wheel loaders, motor grades, dump trucks, and mini excavators. In April 2017, the American subsidiary of Komatsu acquired Joy Global, a world leader in high-productivity mining solutions. The company also recently announced a partnership with NVIDIA to improve the safety and productivity of construction job site operations by introducing AI.

IR17

Supplier Risk Analysis Helps an Automobile Industry Client Assess Risks Associated with the Procurement of Automotive Components

Category Overview

Over the past few years, the unremitting growth of technology has put automobile industry manufactures under tremendous pressure to increase their visibility through robust product offerings. Additionally, suppliers in this industry space play a crucial role for automobile industry manufacturers to efficiently track and monitor their production line. As a result, leading firms in the automobile industry space are effectively working towards enhancing their supplier relationship and building trust with suppliers to improve profits and ROIs. Firms have also started adopting supplier risk analysis studies to assess the risks associated with the procurement of automotive components and improve the quality and delivery of supply chain activities.

The Procurement Pain Point and Insights Offered

A renowned client in the automobile industry was facing predicaments in understanding the macro and micro-economic risks associated with the procurement of automotive components. The client further wanted to understand and profile their suppliers and comprehend the risks associated with them. Moreover, to gain a stronger foothold in the automobile industry, the client wanted to devise superior mitigation strategies across the supply chain.request free proposal

The supplier risk analysis experts at SpendEdge devised a comprehensive two-step research methodology that comprised of primary and secondary research coupled with qualitative and quantitative data collection methods to cater to the specific category requirements of the client. During the course of this supplier risk analysis engagement, the renowned automobile industry client was able to identify the significant risks associated with subsidiaries across the globe. Additionally, the client was also able to monitor the supply chain, enhance supplier service, shorten time-to-market, and improve product quality.

Fundamental questions answered in this supplier risk analysis study include

automobile industryBusiness Outcome

This supplier risk analysis engagement helped the automobile industry client assess risks associated with the procurement of automotive components and devise robust mitigation strategies across the supply chain to minimize the risks. Additionally, the client was able to gauge the pricing strategies under fluctuating market conditions with the help of a flexible modeling tool.

Want to know more about our supplier risk analysis study?

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IR18

Procurement Research Report on the Global Natural Fragrance Ingredients Market Now Available from SpendEdge

Rapid urbanization and increasing awareness about the health-based benefits of natural and organic beauty and personal care products in emerging economies across APAC, South America, and MEA drive the market growth for natural fragrances ingredients.  

LONDON: The strategic procurement research report on the natural fragrance ingredients market is an essential part of SpendEdge’s agro commodities and raw materials category portfolio and offers a deep-dive analysis of the existing supply market, key factors influencing procurement decisions, pricing models, and procurement best practices. It also offers deeper insights into the supply chain risk management, key market developments, and demand-supply shifts to help sourcing and procurement experts make smart procurement decisions.

The constantly increasing awareness about the health-based benefits of natural and organic beauty and personal care products in emerging economies across APAC, South America, and MEA is driving the market growth for the natural fragrance ingredients market.

“Purchasing managers must engage with suppliers through a global sourcing model to source their natural fragrance ingredients from across multiple geographies that cultivate high-quality raw materials,” says A Kowshik, an agro commodities and raw materials industry procurement research specialist at SpendEdge.

One of the key challenges faced by purchasing managers are the increasing supply chain complexities due to intensive regulatory approval and excessive documentation. Purchasing managers look for high product value, competitive product lines, and product extensions and hence suppliers need to ensure that they adhere to local, national, and international regulations.

  Need more insights on this report?

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This procurement research report on the natural fragrance ingredients market offers insights on:

  • Supply markets, growth drivers, and challenges
  • Key suppliers and assessment of their capabilities
  • Procurement best practices
  • Negotiation strategies and cost-saving opportunities
  • Pricing models and category innovations
  • For a full, comprehensive list, view our report

 

 

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