Globalization and digitalization are both double-edged swords for business. On one hand, opportunities for growth and increased business performance are highly beneficial. On the other, the potential for risk is hugely increased, and the job of anyone involved in managing risk in the supply chain is a far more convoluted one.
From natural disasters to political instability and conflict, from financial crises to cyber attacks, the vulnerabilities of your modern supply chain are diverse and far-reaching. A malfunction somewhere in your supply chain can have a domino effect on your entire business.
When it comes to supply chain risk management (SCRM), the cause is very much the cure. Vulnerabilities brought about by increased technology will be decreased through technology.
In a conference paper from the 2017 ISPERA conference which explores the impact of digitalization on supply chain risk management, the authors stated “The usage of available real-time information throughout the supply chain can be seen as one way to avoid risks or reduce risk effects in the supply chain. A digitized supply chain makes potential risks visible, allows companies to monitor material flows in real time and to develop future plans (Goh et al. 2013). The main driver for the digitalization of processes are typically an increase in flexibility and reaction rate of industrial/logistics systems (ten Hompel and Henke 2017).”
In this study on how to determine the return on investment of supply chain risk management, it was found that “losses of up to 7.5 % of revenue can be avoided by means of risk prevention, or can at least be considerably reduced in a crisis situation.”
ProcurePort’s advice for the top 3 tools your organization should consider for your SCRM strategy is as follows.
1. Record the right data
Data from disparate sources is not comparable. It is crucial that your business has access to all necessary information about your spend data at all times. When responding to crisis situations, time is of the essence, and you simply don’t have time to be manually extracting and interpreting data from a variety of locations when time is money. The only way to ensure your business has access to real-time analytics is through investing in procurement software that records data in a standardized format and provides analytics.
2. Invest in supplier contract management
In last month’s blog about the secure management of your contracts, we delved into the biggest challenges facing procurement departments, and the plethora of risks affecting global supply chains. Our conclusion was that the best way to mitigate those risks was by your organization maintaining tight control over your supplier relationships. Contract management software is the only way to ensure your organization has complete control over your contract process from bid to completion, and access to real-time, measurable data on supplier performance and contract issues.
3. Consider whether a full procure to pay solution is the way forward
The benefit of a full procure to pay process is automation and transparency. All stakeholders and processes are aligned across the same platform, all data is standardized. The potential for collaboration is increased, and when your P to P software is cloud-hosted, the added benefit is that data can be accessed any time anywhere, enabling your organization to react to developments and remain able to adapt dynamically to change.
A fully integrated and automated procure to pay system can enable your organization not only to streamline processes and positively impact your bottom line but also achieve compliance targets and mitigate risk.
Consider ProcurePort as your e-Procurement partner
ProcurePort’s suite of e-Procurement solutions are designed to provide a platform for your business to record all relevant data and ensure you are best placed to reach your procurement potential. The key factor in controlling your organization’s supply chain vulnerabilities is having insights into your entire supply chain process. ProcurePort’s suite of procurement software delivers on secure data encapsulation and analytics.