June 14, 2017
The Chartered Institute of Procurement & Supply (CIPS) has launched a free online tool to support procurement and supply management professionals and those with an interest in buying to develop resilience in their own supply chains.
A CIPS survey in 2016 of 900 professionals revealed a growing awareness that unmitigated risk can have disastrous consequences for companies in terms of revenue and impact on margins.
Of those surveyed, 46% ‘sometimes’ have mitigation strategies in place and yet 52% expected the same level of service from their suppliers in the event of a disruption.
The Risk and Resilience Online Assessment Tool helps procurement professionals to identify where specific risk exists in their supply chains in seven key areas:
- Geographical. Restrictions on commodities or trade tariffs can have devastating effects on supply chains along with environmental concerns and reputational damage.
- Functional. Poorly conceived strategies and poor systems controls can make critical parts of the supply chain high risk.
- Performance. Suppliers may be engaging in bad working practices or failing to provide the right product, at the right time, to the right place.
- Technical. An inadequate level of internal security surrounding IT systems could lead to cyber risk and loss of customer, or partner data and loss of revenue.
- Governmental. Actions from governments could influence the movement of goods, with sanctions and embargoes and could affect reputation if found to be supportive of human rights abuses.
- Ethical. Dents in customer confidence will affect revenue streams and reputation, disaffected workforces can produced delayed, poor-quality goods.
- Legal. Breach of laws and statutes will cause delays and issues in supply chains. Diligence is required to ensure suppliers and contractors are also compliant.
Taking around 15 minutes to complete, the tool provides a detailed review of resilience in the supply chain, and respondents receive a report highlighting weak areas and where to go for more support and guidance.
In the future, the tool will be a benchmark opportunity to match an organisation’s risk profile against others.
Access the CIPS Risk and Resilience Assessment Tool Now
Andrew Coulcher, CIPS Group Director of Membership & Knowledge said:
“Managing risk and developing robust mitigation strategies have become key components of any procurement and supply chain professional’s daily activity and the centre of focus as supply chain risk is currently at an all-time high according to the CIPS Risk Index”
“Now more than ever, supply chain professionals need every device available to them in risk and resilience to manage the vagaries in this ever-changing landscape of socio, political, legal and ethical impacts. The CIPS Risk and Resilience Tool will provide valuable insights to make organisational supply chains more robust, and able to withstand the forces we are likely to experience in the coming years.”
“This tool follows the launch of last year’s Supply Chain Risk and Resilience good practice guide which complements the traditional, reactive approach to risk and business continuity, drawing on the best from both.”
“The CIPS Risk Index powered by Dun & Bradstreet, reveals the risks global supply chains are exposed to, so professionals gain an informed perspective on risk in the global business landscape. The Index is an early warning sign of changes to the macro environment, supported by country reports for more detail on risk in specific regions in the world.”
CIPS Resilience Model
Whilst there are numerous BSI and ISO standards developed for business continuity, risk management and organisational resilience there is no global benchmark that can be used to test and develop an organisation’s end-to-end supply chain resilience.
The objective of this CIPS introduction along with the forthcoming good practice guidance and online tool is set to fill this gap. This will help procurement and supply management professionals support the survival of their organisations by identifying supply chain risks whilst protecting shareholders and the general public against the effects of disruption and malpractice.
The Risk Elements
Download the Paper: Supply Chain Risk and Resilience