4 procurement vetting pitfalls to avoid

| 0 Comments

 

RudiKruger_2017.jpgMistakes in business come with the territory, but those made in procurement ought to be considered among the most detrimental to the success of an operation. Common procurement related risks include supplier issues such as delivery delays, increases in demand, quality problems and fraud. These issues are often the result of mistakes made in the procurement vetting process, Rudi Kruger, general manager of Risk Solutions at LexisNexis Data Services, told SmartProcurement.

Mistake # 1 - Insufficient supplier information

In the technological age, information is abundantly available to those who seek it. However, many organisations still neglect to gain valuable information on their suppliers. Aside from the financial stability and reputation of a supplier, each business has its own unique requirements from their suppliers.

“It is of absolute importance to know where suppliers source from and the challenges they face within their own supply chain. Suppliers must be transparent and willing to declare crucial information that could potentially affect your business. Business could be affected by delivery delays, inconsistent quality and changes in pricing owing to fluctuations in the international exchange rate,” said Kruger.

Mistake # 2 - Neglecting supplier-employee relationships

It is expected that supply chain employees will form relationships with suppliers by working with them regularly. However, it becomes a problem when these relationships develop into opportunities for personal gain.

“Fraudulent activity and conflict of interest between supply chain partners and employees is always a risk. Ensure that supplier and employee relationships do not cross the line by running regular checks on staff and suppliers,” said Kruger.

Mistake # 3 Poor relationship management

“Neglecting to develop and maintain strong company-to-company relationships with suppliers puts the success of your business on the line, as a disaster on the part of a supplier could negatively affect your organisation,” said Kruger.

He added that it takes time to nurture relationships with suppliers, but it is worth it as it leads to reduced costs, increased efficiency, performance and communication, better understanding of each party’s business model, good customer service, continual improvement and the ability to adapt to each other’s needs.

Mistake # 4 Failing to use technology

There are many solutions on the market designed to simplify every aspect of procurement. Failing to take advantage of these tools could result in weakened efficiency, excess expenditure and increased administrative errors.

Effective systems can assist organisations, including government departments, corporates, financial institutions, business bodies and risk, and procurement professionals to identify and prevent corruption within procurement processes. They are able to identify ownership of property and the business interests of employees, as well as recognise conflicts of interest within organisations and potential supply chain partners.

“With the help of South African Fraud Prevention, LexisNexis Data Services’s own solution, Lexis ProcureCheck, assists with identifying potential fraudulent activity within suppliers and employees. It also enables users to investigate negative and positive news on suppliers and employees to assist in mitigating reputational risk,” said Kruger.

For more information on how effective procurement vetting and the tools available email Rudi Kruger on rudi.kruger@lexisnexis.co.za or visit www.procurecheck.co.za.

Leave a comment


 

 

Career opportunites

Planner

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Are you looking for new career opportunities as

Procurement Specialist

  • >500 000 Gauteng Procurement Officer / Specialist Strategic Sourcing Supplier / Business Development
As a specialist Supply Chain recruiter, I am

Logistics Controller

  • <500 000 Gauteng Logistics & Warehousing Procurement Officer / Specialist
Seeking dynamic up and coming candidates looking for

Supply Chain Manager

  • >500 000 Permanent Procurement Management Supply Chain Western Cape
As a specialist Supply Chain recruiter, I am

Business Process Specialist

  • <500 000 Gauteng Procurement Consultant Procurement Officer / Specialist Supply Chain
A company within the financial services sector is

LOC Procurement Manager

  • Gauteng Permanent Procurement Management Procurement Officer / Specialist
Your Responsibilities: Job Purpose To be the interface ...More

Account Manager

  • >500 000 Procurement Officer / Specialist Supplier / Business Development Western Cape
Key Performance Areas:• To ensure that all aspects

Consultant

  • >500 000 Gauteng Procurement Consultant Strategic Sourcing Supply Chain
Key Performance Areas:• You'll be concerned primarily with

Commercial Buyer

  • <500 000 Buyer Contracts Procurement Officer / Specialist Western Cape
A well-known Mining company is seeking the services

Technical Buyer

  • <500 000 Buyer Contracts Procurement Officer / Specialist Western Cape
A well-known Mining company is seeking the services

Business Development Executive

  • >500 000 Gauteng Supplier / Business Development
A retail solutions company is seeking a New

Financial Manager

  • >500 000 Contract Operations, Planning & Inventory Procurement Management Western Cape
Looking for an unemployed CA (SA) in Cape

Chief Financial Officer

  • >500 000 Gauteng Operations, Planning & Inventory Procurement Management
An exciting opportunity exists for a CFO with

Procurement Consultant

  • >500 000 Gauteng Procurement Officer / Specialist Strategic Sourcing
Key Performance Areas: A profound knowledge of sourcing

Commodity Specialist: IT

  • >500 000 Commodities Gauteng Procurement Officer / Specialist
Key Performance Areas:• Effectively applies acquired technical/functional skills

Senior Consultant

  • >500 000 Gauteng Projects / Category Management Supplier / Business Development
Key Performance Areas:• Adheres to best practice processes

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Procurement Management
Key Performance Areas:• Manage warehousing and distribution 3PL's

Head of Franchise Network

  • >500 000 Contracts Operations, Planning & Inventory Western Cape
The opportunity to work for a multinational retail

National Driver Manager

  • >500 000 Analyst Contracts Logistics & Warehousing Operations, Planning & Inventory Western Cape
The opportunity for an extraordinary individual to join

Commodity Specialist: Industries

  • >500 000 Commodities Gauteng Procurement Officer / Specialist
Key Performance Areas:• Under the guidance of the