Risk Management

Silk vs. steel: rebuilding supply chains after COVID-19

Kelly_Barner.pngBy Kelly Barner, Owner and Editor, Buyers Meeting Point

Supply chain disruption was a popular topic long before the world was seized by the coronavirus pandemic. Geopolitical disturbances, natural disasters, labour strikes and changing regulations were already factors, and anyone that has been in supply chain during the last decade has seen all of these play out.

At this point, the phrase 'supply chain disruption' seems as natural as 'supply chain' must have seemed the first time people put these two words together. It would be easy to assume that all supply chains have been disrupted, especially given the breathless news coverage and layman consumer's perception that toilet paper and meat are impossible to purchase. While most supply chains have been affected by today's fluid, unpredictable conditions, few have stopped altogether.

3 experts share how to strengthen supply chain defences

Navigating_100.jpgThree procurement experts share their strategies for mitigating supply chain risk after 2020.

The Economist put it best in July 2020: "You may have lost interest in the pandemic. It has not lost interest in you. COVID-19 is here to stay. People will have to adapt. The world is not experiencing a second wave: it never got over the first."

This reminder rings true for procurement and supply chain leaders.

Managing Supply chain cyber risks

VenishaNayagar_100.jpgWhen companies think about security, it is usually about securing their networks, software and digital assets against cyber-attacks and/or data breaches. But, in supply chain - whether it is a vendor used for facilities management or for cloud hosting - almost every organisation depends on a growing supply chain of services, creating an eco-system of dependency. As this eco-system grows to include fourth- and fifth-parties, it becomes more vulnerable to security risks. Recent major cyber-attacks were as a result of third-parties being compromised.

In this month's SmartProcurement, Venisha Nayagar, Director at Crypt IT Information Risk Management, takes a look at supply chain data risks.

Procurement in a pandemic: top tips for tricky issues

AmyRyburn_LisetteHood_200.pngBy Amy Ryburn and Lisette Hood, from commercial and public law firm Buddle Findlay

Procuring organisations (buyers) are currently grappling with a number of tricky issues arising from the COVID-19 pandemic, including issues relating to both live and planned procurement processes.

Buyers who are facing significant uncertainty, or who are without the resources to effectively staff procurement processes at this time, are faced with difficult decisions, such as whether to continue with live procurement processes or whether to commence new ones; what to do if procurement processes are cancelled or delayed; and whether and how to address the influence of COVID-19 on tender documentation (in relation to the tender process itself and the contract that is released - in particular any proposed force majeure clauses).

Face protection masks could inject at least US$1.5-billion annually into the African economy

DouglasBoateng_100.jpgOn 27 June 2020, MarketWatch reported that the global disposable face mask market size was anticipated to reach US$23.81-billion by 2027.

On 30 June, Goldman Sachs released an extensive economic analysis of why the wearing of a face mask is a must. By studying the link between coronavirus infections and mask mandates in US states and overseas, the reputable global investment bank estimated a national directive could cut the daily growth rate of confirmed cases by one percentage point to just 0.6%.

According to the bank, the reduction could prevent the need for lockdowns that could wipe 5% off of US gross domestic product (GDP). The implications of not wearing a mask and the associated health and socio-economic consequences are no different in emerging and developing economies. The coronavirus (SARS-CoV-2) and associated COVID-19 pandemic has, however, resulted in the emergence of a face protection mask (FPM) industry.

In Africa, this rapidly-evolving sector could contribute approximately US$1.5-billion annually to the continent's economy. This is according to supply chain and industrialisation expert, Prof Douglas Boateng.

COVID-19 | How can procurement drive organisational strategy in the face of turbulence and vulnerability?

Mediacy_Mudekwa_100.jpgBy Mediacy Mudekwa

Just a few months ago, none of us would have imagined that our world would come to a standstill. The very things we have always taken for granted are now nearly impossible to do. Travel, gatherings or even a visit to your favourite restaurant may be many days away.

As some governments begin a phased and cautious approach to re-open the economy, we have to consider just how vulnerable and unpredictable these times are. The life cost of this pandemic is staggering, with confirmed cases currently at more than 6.4 million globally. Recent studies have made it clear that these figures are an under-estimate.

But what has been the true cost of this pandemic to the economy? How has this pandemic affected procurement, especially from a risk perspective? How can procurement come to the party and drive organisational strategy in the face of turbulence and vulnerability?

Supply chain management toolkit among the support measures launched by SAPICS

COVID-19_125.jpegTo support supply chain professionals and to ensure that they have the resources they need to maintain supply chains during the coronavirus crisis, supply chain management professional body SAPICS has launched a number of special support initiatives to aid the profession. This includes a supply chain management toolkit, helpline and collaboration platform.

Which global risks are increasing in 2020?

SteveBanker_100.jpgBy Steve Banker, Vice President: SCM, ARC Advisory Group

One of the good things that comes out of the World Economic Forum's (WEF) annual meeting in Davos, Switzerland, is the Global Risks Report. Produced by the WEF, the report serves as a centrepiece for the themes addressed at the Davos event.

The report includes a survey of more than 1 000 members of various stakeholder communities. The reported results are worth the attention of executives that participate in risk management programmes at their respective organisations.

The top 10 supply chain risks of 2019

TobiasLarson_100.jpgShehrinaKamal_100.jpgModern supply chains are more complex and global than ever before. But that also leaves them open to a wider variety of risks and disruptions. Tobias Larsson, Chief Executive Officer, and Shehrina Kamal, Director: Risk Intelligence at Resilience360, a supply chain risk monitor that identifies potential supply chain disruptions, list ten supply chain risks to track over the next 12 months.

Corruption and collusion: lessons from Africa

ElainePorteous_100.jpgBy Elaine Porteous

Corruption is not unique to Africa, nor is it a new problem. However, Africa is perceived as the most corrupt region in the world as well as the most under-developed. Corruption is a complex social, political and economic phenomenon that slows economic development and contributes to governmental instability. There is no simple solution. There have been numerous academic studies and notable interventions by such institutions as the World Bank, the United Nations and the Norwegian Government, but progress remains agonisingly slow.

How to spot supplier risk during on-site evaluations

BenGoldwasser_100.jpgIn a previous article, Ben Goldwasser, Business Development Professional, Spendrix, discussed how to spot risky behaviour when communicating with suppliers. In this month's SmartProcurement, Goldwasser identifies supplier risk and explores what to look out for during on-site evaluations. This is specifically beneficial in the transportation and logistics industries when visiting carriers in person. While on-site evaluations are not a requirement, visiting carriers can help you to build better relationships and to improve communication. Also, visiting carriers on-site allows you to evaluate them for risky behaviour that could potentially affect your company.

Here are some things to look out for the next time you visit a carrier on-site:

Procurement perspectives: corruption thrives on secrecy in government procurement

StephenBauld_100.jpgInconsistency in procurement processes is prevalent. In many published articles on a variety of topics, corruption is much like a mushroom, it thrives in the dark.

The benefit of competition is well-recognised by economists but, to a large extent, concern around public procurement processes is based more on the concerns of political science rather than on those of economics.

"The goal is to avoid corrupt practices", says Stephen Bauld, a government procurement expert.

How to spot supplier risk in communication

BenGoldwasser_100.jpgCommunication is a critical component of any business and is no less crucial in supplier relationships. When your company has great communication with its suppliers, it can be like adding another department to your organisation.

There are a large number of suppliers who do an excellent job communicating with their customers. You probably have several suppliers that you can think of right now that practice excellent communication. But what is it that sets these suppliers apart? Ben Goldwasser, Business Development Professional, Spendrix, investigates.

4 reasons to get your whole business to do procurement

BorisShiklo_100.jpgHow do you achieve effective procurement − by affording all departments the opportunity to purchase directly? What are the risks of such an approach and how can you reduce such?

Most mid-sized and big businesses already have a dedicated department responsible for providing the company with everything from paper to spare parts for production-line repairs. So, why would you offer to involve other employees in the procurement process?

Boris Shiklo, CTO, ScienceSoft, explains how you may benefit from such an approach, what the risks are and how they can be mitigated.

Is not spending, a saving?

MiraRistovich_100.jpgBy Mira Ristovich, Founder of MRC, a consulting firm that assists with various end-to-end projects, and Senior Associate at Bespoke Group Africa, an organisation dedicated to the strategic procurement outsourcing of projects.

Two decades after I began my work in procurement (I was involved in business performance management and measurement prior to joining the procurement family), I can still remember how surprised I was to find that many business owners believed that not using an allocated budget meant that they were saving money.

Unfortunately, this kind of thinking still exists.

Free State welcomes Smart Procurement World

SPW_FS_100.jpgSmart Procurement World is bringing its regional conference to the Free State.

Partnering with the Free State Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA) has enabled Smart Procurement World to take its procurement and supply chain indaba into its fourth South African province.

Since beginning in Gauteng in 2009, Smart Procurement World has extended into the Western Cape, KwaZulu-Natal and, on 19 March 2019, into the Free State.

Vendor database optimisation: Are you doing it right?

Schalk_vdMerwe_100.jpgOne of the primary components of any procurement function's strategy is, or should be, to ensure that the company has an optimised vendor base. This is aimed at achieving a more cost effective and high-quality supply chain.

Most companies therefore go through a vendor rationalisation process at some stage and continually review vendor categories to ensure that the selected set of vendors remains the best fit for the respective services or products they deliver to the business.

Optimising the vendor base is normally done by assessing various elements such as pricing, service delivery, contractual terms, internal stakeholder sentiment etc., which are, of course, all very important elements to consider. However, the important elements most often overlooked are the non-contextual ones, says Schalk van der Merwe, Executive Head: Supply Chain Governance at data powered risk solutions provider Inoxico.

6 steps to maintain a successful vendor selection process

RudiKruger.jpgIt is important to do business with the right vendors if you want you want to stay on the right side of the law while ensuring that the business' needs are met. With hundreds of suppliers offering relevant products and services, the vendor selection process can appear strenuous and time consuming. However, if done the correct way and in line with the business' best interests, the supplier selection process can be achieved with ease and peace of mind.

Rudi Kruger, General Manager at screening solutions provider LexisNexis Data Services, says that vendor selection can be successful if you have a handle on important aspects of the process.



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