Tag: supply chain risk

supply chain risk management

CPG Company Utilizes SpendEdge’s Supply Chain Risk Management Solution to Achieve Cost Savings of Over 11%

The Business Problem

The client is a well-renowned company in the consumer packaged goods (CPG) industry and produces a wide range of products in the beauty, grooming, and household care units. The client’s business units were spread across 50+ countries across the globe. However, they were facing challenges in price and quality benchmarking for their products and machines. The need to identify suppliers who were critical for their business processes and associated risks compelled them to engage with SpendEdge. The key aspects they were looking to address through this engagement were:

Risks Associated with OEM Supplier and DFC Rolls: The double face corrugated (DFC) rolls used during shipment to prevent boxes from getting damaged lacked superior quality. In addition, machine cutting consumables were directly purchased from the original equipment manufacturer without any price benchmarking; thus, increasing the possibility of supply chain risk.

Cost of Reusable Gloves: The single-use gloves used by the client were becoming cost prohibitive and they were facing challenges identifying new suppliers who were within their budget limit.

Improving your supplier identification process can help you achieve substantial growth. To know more about how we can help your business with our supply chain risk management solution, request a free proposal below!

Solutions Offered and Client Journey

The experts at SpendEdge carried out a comprehensive risk assessment and identified suppliers who were critical for the company. In addition, they identified risks associated with key stakeholders and those associated with supply capacity, fluctuation in supply capacity, and their subsequent impact on prices.

In a span of three weeks, the experts at SpendEdge offered a solution to improve the client’s supply chain risk management capabilities. They also recommended utilizing an existing and pre-approved chemical supplier to provide/produce nitrile reusable gloves. The insights offered helped them to identify appropriate suppliers and evaluate their performance proactively. With our help, the CPG company was able to secure alternate suppliers and reduce the likelihood of supply chain disruptions. 

Wondering how you can proactively identify supply chain risk and devise strategies to manage them?

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Key Findings and Outcome

SpendEdge’s supply chain risk management service enabled the client to identify new suppliers and assess their delivery capabilities. The initiation of quality testing and price benchmarking helped create competition among the existing suppliers and provided opportunities for efficient contract management. The supply chain risk management solution helped the client to:

  • Achieve cost savings of more than $9,000, while exploring the usage of reusable gloves.
  • Reduce dependence on OEMs and achieve cost savings of more than 11%.
  • Shortlist suppliers with low financial risk and identify cost-saving opportunities.
  • To know more about this engagement, get more info.

Types of Supply Chain Risk

Supply chain risk management

Why is Supply Chain Risk Management Important?

Supply chain risk management is an essential part of any strategy and plays a crucial role in determining the financial health of any company. It helps determine the success of your business by helping you to proactively strategize plans for business risks. Supply chain risk management is imperative for companies looking to ensure the smooth functioning of their business units. To know about supply chain risk management best practices, click here.


Want to know more about supply chain risk management best practices for your industry? Get in touch with our experts today!

supply chain risk

Why is Supply Chain Risk Management Important for Businesses Today?

With the globalization of supply chains, the number of third-party logistics (3PL) providers has increased, substantially. However, business strategies such as outsourcing, supplier consolidation, and low-cost sourcing offer immense opportunities but have several risks associated with them. This has forced decision-makers to think about why is supply chain management important and what are some of the best practices to mitigate supply chain risk.

At SpendEdge, we understand the risks associated with a global supply chain and to help companies answer questions such as “why is supply chain management important?” and “how to mitigate supply chain risk?”, we have listed below some of the best practices for managing a supply chain.

Why is Supply Chain Risk Management Important? 

With companies across the globe focusing on becoming more efficient, supply chains have become extremely vulnerable to risks. Most firms fail to perform an effective supply chain risk assessment before outsourcing their products and services. At times, they simply rely on annual risk registers, which are usually created for insurance companies. A failure to identify and minimize these risks can lead to supply chain disruptions and profit losses. By improving supply chain risk management capabilities, companies can easily analyze dynamic factors that may lead to risks.

Want to know more about supply chain risk management best practices and how you can mitigate supply chain risks? Request a free demo and access our SpendEdge Insights platform for free!

Supply Chain Risk Management Best Practices

SpendEdge has identified some of the best practices to help companies manage risks in the global supply chain and achieve better consistency and value. They include:

  • Innovations in contract management: Companies can adapt to newer styles of contract design rather than following old-styled onerous ones. This will enable them to streamline contracts by understanding the significant cost of creating and negotiating old-style “legalese” contracts.
  • Supplier insurance and limitations of liability: Organizations using external suppliers for products or services, either upstream or downstream, necessarily need to evaluate potential liability exposure. Every contract must have provisions of protections by limiting liabilities, ensuring security against legal liabilities, and insurance of suppliers. 
  • Visibility of suppliers’ financial stability: By leveraging predictive financial stability data, companies can gain highly positive SCRM visibility to a firm’s management team for free. Additionally, it can warn procurement professionals of potential supply chain failures.

What’s in it for you?

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  • Gain detailed insights into the best strategies to improve visibility in the global supply chain.
  • Learn to reduce the complexity of a supply chain risk and prevent it altogether.
  • Proactively identify any global supply chain risk and ensure timely delivery of products.
  • Obtain a comprehensive overview of flow of materials and products.
  • Maintain business operations by efficiently addressing potential supply chain disruption.

Managing any type of supply chain risk is a taxing job and can result in major profit losses for companies. Request a free proposal to gain a comprehensive overview of our solutions portfolio for managing supply chain risk.

Why SpendEdge:

SpendEdge delivers robust, real-time procurement market intelligence solutions to help sourcing and procurement professionals to improve supply chain risk management capabilities. Our innovative procurement solutions help enterprises to transform the structural capabilities of businesses and improve execution efficiency. Our state-of-the-art supply chain risk management solutions also help enterprises to transform structural capabilities, improve execution efficiency, and achieve better cost savings. We provide businesses with actionable insights and techniques to improve their procurement capabilities.

Interested in gaining a comprehensive overview of supply chain management best practices for your industry?

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6 Major Causes of Supply Chain Risk and Ways to Overcome Them

Supply chain risk is an inevitable component of a business, and these risks evolve and become more prevalent with time. In this dynamic scenario, yesteryear’s supply chain risk management strategies often prove to be ineffective. Businesses having a poor grasp of hazards in the supply chain will increase freight spend and diminish the brand value. However, having an idea about the supply chain risk that companies endure in the global market will help reduce their impact. This will also enable shippers to mitigate the likelihood of occurrence and minimize disruptions simultaneously.

Unfavorable weather conditions

Extreme weather is a significant supply chain risk to ocean freight activities. Tropical storms can prove disastrous for ocean carriers. The recent reports on the global climate change indicate tropical storm threat is on the rise. One of the ways in which shippers can avoid such supply chain risk is through re-evaluating ocean route used and determining which carriers can increase shipping in anticipation of tropical storms.

Connectivitysupply chain risk

In the age of modern trade, supply chain risk exists within the connectivity of systems. The integration and modification of systems increase the risk even though systems can be integrated through an open-source software. Furthermore, poorly integrated systems could lead to bottlenecks and disruptions in the supply chain. To stay prepared for such contingencies, companies must create a backup data resource and decentralize the data storage. It is also vital to ensure that the system connectivity is on a secure network. Furthermore, companies must give emphasis to avoid unnecessary modifications, and work with expert supply chain systems’ integrators in order to maximize profitability and efficiency.

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4 Incredible Techniques for Supply Chain Risk Management

What is supply chain risk management? 

Supply chain risk management refers to the process of undertaking strategic steps to identify, assess, and mitigate risks in the company’s end-to-end supply chain. As businesses both small and large seek to extend their global reach, risk management in the supply chain is increasingly becoming crucial. Businesses that enter into new markets often need to form new supplier relationships, engage with state-owned entities, and adapt to local laws and culture. This results in supply chain complexity that can result in a wide range of financial, regulatory, and legal risks. Supply chain risk management strategies help enterprises to foresee potential issues and adapt to the risks and supply chain disruptions as quickly and efficiently as possible.Contact US

Supply chain risk management techniques

Innovation and efficiency in contracting management

One of the emerging trends in supply chain risk management is contract streamlining.  It involves having a better understanding of the costs involved in creating and negotiating old-style “legalese” contracts. Many of these are unnecessarily written in legal prose, lengthy, difficult to understand, one-sided protections. But newer styles of contract design and wording enable procurement teams to have a dramatically-higher success rate of executing well-drafted agreements. Procurement contract portfolios are a great example of how legal risks can outweigh business balance, extending the contracting cycle time and procurement efficiency. Instead, several legal and procurement groups find it better to rely on concise and well-balanced contract documents that result in easier acceptance by suppliers.

Better understanding of potential suppliers

It is important for businesses, especially in the global scenario to have a clear understanding of the thirdcta SE-party supplier’s business practices. This involves answering critical questions such as – Does the supplier have a strong track record for meeting contractual obligations? Are there any conflicts of interest in existing business relationships? Do the suppliers observe the same high standards as your company with respect to providing safe working conditions and protecting the environment? It must be ensured that the supplier meets all the pre-requisites of the business before onboarding a new supplier.

Supply chain risk management awareness and training

Supply chain risk management strategies cannot be successful unless significant attention is given to training personnel on supply chain policy, procedures and applicable management, operational and technical controls, and practice. Building an awareness training program provides guidelines for establishing and maintaining a comprehensive awareness and training program.

Resolve or prevent disputes effectively

Disputes are inevitable elements in different stages of the supply chain. One of the key steps in mitigating dispute-related risks and promoting smooth operations is to proactively prevent disputes from occurring or resolving them amicably in case of occurrence. The right processes and technologies are crucial in identifying sources ofdisagreement that can cause disruption in the supply chain. It is important to employ people with the right communications skills and the ability to not affect the ongoing supply of materials. A mutually beneficial resolution is often the best way to maintain a relationship that not only mitigates risk but also enhances value for the company.


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5 Techniques for Effective Supply Chain Risk Management

Risk is essentially a part and parcel of every company’s supply chain. Companies often lose millions of dollars due to cost volatility, non-compliance fines, supply disruption, and incidents that cause damage to the reputation of the brand as well as affects their smooth functioning. This is making supply chain risk management a top priority for businesses. Furthermore, cross-border supply chain activities often have higher risks associated with them. With more number of small and medium-sized businesses rapidly venturing into international markets, sRequest Demo_SEupply chain risk management is becoming more important than ever before for them.

What is supply chain risk management? 

Supply chain risk management is concerned with the synchronized efforts of a company that helps detect, monitor, identify, and eliminates factors that pose major threats to supply chain profitability and continuity. Supply chain risk management strategies help an organization foresee potential issues and adapt to the risks as well as unforeseeable supply chain disruptions as early as possible

Techniques to undertake effective supply chain risk management 

The following are the key steps involved in a successful supply chain risk management process:

Evaluate potential suppliers 

Before companies decide to replace existing suppliers, they must gain in-depth knowledge about the new suppliers. This will help companies answer critical questions about the supplier’s business practices. It is important to evaluate critical factors such as the supplier’s track record in meeting contractual obligations, the quality of goods provided by the supplier, and conflict of interest in the policies of both the parties. Also, forming strategic partnerships with a select group of best suppliers can allow companies to capture a wide variety of benefits—including the potential for scale advantages and priority service.

Monitor quantity and quality standards 

Another important technique for better supply chain risk management is for companies to carefully monitor the adherence of agreed quantity and quality standards by the supplier. Despite agreeing on certain standards, several suppliers fail to match the promised requirements. This makes it difficult for companies to maintain their own high standards while delivering the final product to the end-consumers. Dissatisfied customers can even tarnish the brand name of the company. Hence, by monitoring the supplied good constantly, companies can maintain their quality standards and pave the way for better supply chain risk management.

Prevention or quick resolution of disputes 

Disputes are bound to occur at different stages of the supply chain. Proactively preventing disputes from occurring or resolving them amicably can mitigate dispute-related risks and promote smooth operations. Companies must equip themselves with the right processes and technologies that are essential to quickly identify the sources of disagreement that could disrupt the supply chain.

Keep track of the products received 

It often happens for businesses that they might not receive exactly what they have ordered for. Such incidents result in supply chain waste or fraud. So, it essential to keep a close track of the consignment received so that the companies do not have to end up paying for items that they have not ordered. Having a complex network of contractors can increase the risk of inappropriate markups, duplicate billing, and improper related-party billing.

Avoid sales process risks 

Companies must prepare themselves for the risks that arise from sales operations for effective supply chain risk management. The sales operations of a company act as a crucial link in a loop that returns to the suppliers. This is because the customer demand ultimately affects the company’s purchasing requirement. Also, they can get introduced to new sales risks in a new environment. For instance, if a company establishes itself in a new market, it will have an impact on the procurement-supply dynamic of the business. Companies must accurately forecast and be prepared to face the demand fluctuations in different markets.


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Supply Chain Risk Analysis Engagement: A SpendEdge Case Study on How We Helped a Sensor Technology Company

Engagement Overview:

A leading sensor technology company wanted to enhance their procurement strategies to tackle risks across their supply network. The client also wanted to develop a supply chain risk management strategy to boost their procurement efficiency. To do so, the sensor technology firm approached SpendEdge to leverage a supply chain risk analysis solution and devise an accurate risk management strategy. The supplyrequest proposal chain risk analysis engagement entailed a quantitative analysis of various supply chain categories to build an exclusive risk management model.

About the Client:

A leading player in the manufacturing sector, specializing in the sensor technology segment.

Business Challenge:

The manufacturing sector client was facing several challenges owing to their inefficient risk management strategies.


How did SpendEdge Help the Client?

  • Step 1: Leveraged supply chain intelligence

Leveraging supply chain intelligence offered an all-encompassing analysis of the supply market scenario, trade flows, economic conditions, and supply chain risks.

  • Step 2: Identification and assessment of supply chain risks

Once the risks are identified and their source has been discovered, it is essential to assess each risk factor to measure their impact on the organization’s growth. This step involved the classification of identified risks based on the impact of their consequence and likelihood of occurrence.

  • Step 3: Analysis of gathered information to develop a precise risk assessment framework

To devise an effective supply chain risk management framework, it is essential to analyze the gathered data to identify risks and develop strategies to avoid their future occurrence.


Key questions answered in this supply chain risk analysis engagement include:

Supply Chain Risk


Benefits of the Engagement:

The supply chain risk analysis experts at SpendEdge devised a three-step comprehensive approach that helped the manufacturing sector client to develop a precise risk management framework by taking into account all the risk factors across the organization’s supply network. Also, the developed supply chain risk management model enabled the client to enhance procurement efficiency.

Why implement supply chain risk analysis?

Organizations across industries face several challenges in maximizing the value obtained from their supply network to meet the end-user’ expectations for sustainably. To maximize supply chain value and enhance sustainability, businesses need to identify the source of risks across the supplier network and implement iterative strategies to mitigate them.

Moreover, since supply chain risks range from violation of human rights to operational disruptions, it is essential to consider key factors affecting the supply network while devising an appropriate risk management framework. This is exactly what the supply chain risk analysis experts at SpendEdge specialize in. Our industry-specific guidelines help clients develop precise supply chain risk management strategies to ensure that they meet the industry needs and framework standards.

Our Findings:

SpendEdge’s supply chain risk analysis solutions are guided by the principles of supply market intelligence to help clients enhance their overall supply chain efficiency. In this supply chain risk analysis engagement, the three-step approach empowered the sensor technology client to integrate supply chain data from various sources to identify supply chain risks and implement appropriate risk mitigation strategies.


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Supply Chain Risk Management Helps a Renowned Client in the CPG Industry Save Millions

Overview of the CPG Industry

The global consumer packed goods (CPG) industry typically consists of groups including appliances, toiletries and cosmetics, and food and beverage. The CPG industry acts as a foundation for the modern consumer economy as it drives not only massive amounts of money into other businesses like retail and advertising but also generates a massive portion of the gross domestic profits (GDP) for countries across the globe. Over the years, the CPG industry has started witnessing a migration from offline to online channels to reinvent themselves in the market despite slowing GDP growth and currency weaknesses. CPG industries are thinking beyond the conventional shopping to create and improve the shopping experience for customers with the recent digital advances. Although the CPG industry is witnessing a promising growth with the advancements in the technology, several factors will likely hamper the growth of the sector. These factors include:

  • Decreasing Operating Margins: CPG firms need to take into consideration the volatilities in the pricing of oils and their effect on transportation costs. This is because there is an increase in the need to distribute high-quality products while focusing on innovative, cost-effective measures.
  • Fluctuating Consumer Demands: Today, CPG establishments need to be more dynamic, and consumer-focused as the demand from the consumers is fluctuating. Additionally, consumer preferences have transformed and moved toward sustainable options. Furthermore, the success and profitability of CPG companies are dependent on how they address the changing needs and reduce the risks.

These factors are compelling players in the CPG industry to leverage the use of supply chain risk management solutions. Supply chain risk management solutions help companies integrate several previous or ongoing initiatives, including those for business continuity and supply-chain security. Firms can also make use of these solutions to identify and prioritize risks they face and devise risk treatment plans, which include measures to protect the supply chain. This eventually helps them achieve production and delivery capabilities while avoiding sales losses.

Developing supply chain management capabilities is crucial for companies to avoid revenue losses. Request a free proposal and leverage our supply chain risk maangement solutions. 

The Business Challenge and Journey

The client, a leading player within the CPG industry space with business operations spread across the globe, wanted to identify the potential opportunities to make their supply chain more resilient and maintain topline revenue and market share even in case of a supply chain upset. Additionally, the client’s procurement function was also fragmented, which resulted in challenges during external events – such as natural calamities. These events send buyers scrambling for available capacity without any teamwork and collaboration.

To identify the potential opportunities and help the client achieve a more resilient supply chain, SpendEdge’s supply chain risk experts tailored an extensive research methodology. The research approach comprised of primary and secondary research coupled with qualitative and quantitative data collection procedures.

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During the course of this engagement, the CPG industry client was able to align their category management strategy with supply chain risk exposure. Additionally, they also monitored the complete process, starting from risk analysis and risk evaluation through risk management and right up to residual risk control. This subsequently helped them better source and accordingly adjust the total cost of ownership.  For detailed insights into the supply chain risk management solution offered, request for more information.

Fundamental Questions Answered in this Supply Chain Risk Management Engagement

The Results

The CPG industry client, with the help of the supply chain risk management solutions, gained actionable visibility into all types of risks including by cost and quality, supplier, category and location, natural disasters, and legal and compliance.

Want to address supply chain risks? Get in touch with our experts and access our supply chain risk maangement solutions.  

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Supply Chain Risk Assessment Helps a Renowned Alternative Energy Supplier Address Flaws and Curtail Costs Across the Supply Chain

Category Overview

In this era of constant innovation and compliance regulations, firms operating in the power and energy space have started looking for renewable and alternative sources of energy. Additionally, the with the demand for fossil fuels reaching its saturation point, firms operating in the alternative energy space are seeking ways to address flaws and reduce their overall operational costs across the supply chain. request free proposalConsequently, to understand and devise means to tackle challenges across the supply chain, renowned businesses in the alternative energy space are advocating the need for robust supply chain risk assessment studies. Supply chain risk assessment studies help firms gain real-time actionable strategic insights into the flaws in the supply chain and formulate effective strategies to stay on par with the competition.

With years of experience in offering a wide range of supply chain solutions, the supply chain risk assessment specialists at SpendEdge help players across the alternative energy space to gain better flexibility into the current supply chain process; thereby, helping them improve business performance.

The Procurement Pain Point and Insights Offered

A leading alternative energy supplier client was facing predicaments in identifying the supply chain flaws. As a result, the client wanted to gain better visibility into their supply chain operations and formulate strategic ways to mitigate disruptions across the supply chain. Additionally, the client wanted to categorize the key performance indicators to curtail logistics costs and improve service quality.

To address the specific predicaments faced by the alternative energy supplier client and help them address flaws and curtail supply chain costs, the supply chain risk assessment specialists at SpendEdge tailored a unified research methodology, which involved primary and secondary research coupled with quantitative and qualitative data collection methodologies.

During the course of this supply chain risk assessment engagement, the alternative energy supplier client was able to devise robust supply chain risk mitigation strategies to curtail supply chain costs. Additionally, the client was able to accomplish better traceability of their services, in turn helping them gain a deeper understanding of the regulatory and compliance requirements.

Fundamental questions answered in this supply chain assessment engagement include

Business Outcome

This supply chain risk assessment engagement helped the alternative energy supplier client improve operational objectives consequently aiding them to curtail costs across the supply chain. Additionally, the client also deployed better sourcing and procurement strategies which helped them strengthen their supplier relationship.

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IR20

Supply Chain Risk Management Helps an Automobile Industry Client Address Flaws in Their Supply Chain

Category Overview

Over the past few years, players in the automobile industry have started increasing their visibility through robust product offerings owing to the unremitting growth in the field of technology. Also, leading businesses operating in the automobile industry space have started leveraging the use of promising solutions to categorize and mitigate the supply chain risks across platforms. Supply chain risk management solutions help automobile industry players in gaining a better visibility into all the procurement and sourcing operations and allow suppliers to limit the logistics costs.

To gain an end-to-end visibility into the supply chain risk factors across the globe, a renowned automobile industry client approached SpendEdge. SpendEdge’s supply chain risk management studies help firms operating in this industry space to streamline and integrate the supply chain processes effectively.

The Procurement Pain Point and Insights Offered

A global automobile industry client was facing predicaments in formulating supply chain risk management strategies to request free proposalanalyze the supply trends and forecasts and gain profitability across the supply chain. As a result, they wanted to understand their current state of supply chain coupled with the import or export scenario. Additionally, the client wanted to identify the likely bottlenecks across the supply chain and resolve it.

SpendEdge’s supply chain risk management experts followed a comprehensive research methodology comprising information from a wide array of primary and secondary resources coupled qualitative and quantitative data analysis to gain detailed insights into the risks associated with the supply chain.

The automobile industry client was able to proactively manage the supply chain risk and deliver better product offerings. Additionally, the client achieved a better traceability of their products and understood the compliance and regulatory requirements across platforms.

Fundamental questions answered in this supply chain risk management study include

Automobile IndustryBusiness Outcome

This supply chain risk management engagement helped the automobile industry client devise practical measures to mitigate the supply chain risks across geographies. Additionally, the client was able to strengthen the supplier relationship and implement better sourcing and procurement strategies.

Want to know more about our supply chain risk management solutions for the automobile industry?

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