Boss Lady

What you need to know about supply chain risk management

on


In the aftermath of the recent worldwide pandemic, running a business is an even riskier venture than ever before. Knowing who your vendors are and the status of your supply chain are paramount to success in a post-COVID world. Understanding the risks associated with the supply chain, how to assess spend risk and selecting a reputable vendor are all increasingly important concerns for your operation.

Thankfully, there are ample solutions to the problem of vendor and supply chain risk management. The ideal solution is to find a service that will not only provide insight into risk management at every step of the process, but give you peace of mind and security in how you manage vendor/supply risk in your organization.

There are key features worth looking for in risk management services that will ensure the ideal fit to your needs.

Recommendations and risk scoring

Poor supply chain management is caused by a variety of issues. You may end up spending more on a certain supplier or worse. A centralized, easy use vendor evaluation method is necessary to mitigate the problem and simplify your workload.

Knowing a supplier’s key performance indicators (KPI) can give you a wealth of information about your current relationship with the supplier and help you develop a strategic relationship with them in the future. This is where risk scoring helps cut redundancy and other issues while giving you a tactical advantage when it comes to vendor evaluation. Risk scoring is a major component of good supply chain risk management. When a potential risk score is assigned to a particular vendor based on their history and actions, it becomes part of a multidimensional, constantly shifting risk assessment dynamic.

Good risk management software compiles the data and recommends responses or actions to take based on supplier data and patterns. If the system notices a pattern of negative behavior, it’ll automatically make recommendations from putting spending on hold for that supplier to moving to another supplier entirely.

Visible spend risk

Assessing spend risk and vendor management manually ends up costing more in the long run. You or your staff don’t need to spend all their valuable time chasing suppliers or dealing with bad supplier behavior. Reliability data and real-time visibility of all risks associated with spend provide a powerful weapon in your risk assessment arsenal.

A visual representation of recent spend and how it compares to past spending helps reduce maverick spend issues, vendor problems and potential disruptions in your company’s supply chain. With good software, you can quickly access vendor requests, approvals, payments, invoices and purchase information.

Well developed risk ratings

One of the best applications of a vendor management and supply chain risk software is the ability to dynamically score a supplier/vendor based on how they’ve behaved in the past, the quality of their service and a summary of third-party data about that supplier. The software performs an assessment often, rather than occasionally as many corporations do.

You can easily vet critical vendors based on risk assessment and easily replace a critical vendor who may also present a high risk. Software with dynamic risk ratings removes the guesswork. Access and assessment of a vendor based on restricted party and various other risks or risky behavior is another key component and covered by most software solutions. Each risk rating is meticulously compiled to give you all the information you need to prevent supplier issues at the source.

Transaction control

Duplicate payments, rogue spending and over-charging are no longer issues when you can instantly take control over them. If a vendor presents risky behavior, it should be simple to take swift action and maintain control over the situation. Stopping a PO or invoice in real time is not only possible with supplier management, it’s easy to find a substitution based on the software’s recommendations. It’ll recommend everything from stopping payment to selecting an alternate vendor based on data specific to your organization.

Conclusion

Searching for a good vendor management system is challenging, but of the many options on the market today, Coupa’s Risk Aware software is one of the single best options to manage supply chain and vendor risk. With an intuitive interface, detailed reports and a number of built-in features applying to risk management/control, it’s no wonder Coupa’s software is among the top of the line when it comes to vendor risk management software solutions. Take control of your supply chain risk now and it’ll lead to a brighter future for your business, vendors and customers alike.

About Business Woman Media

Our women don’t want to settle for anything but the best. They understand that success is a journey involving personal growth, savvy optimism and the tenacity to be the best. We believe in pragmatism, having fun, hard-work and sharing inspiration. LinkedIn

Recommended for you

What Do You Think?

Your email address will not be published. Required fields are marked *