Geopolitical and economic developments make systematic risk management indispensable in order to ensure reliable supplies. The ongoing coronavirus crisis is a prime example, showing that interconnected supply chains call for proactive and systematic risk management. In our white paper we show you a step by step process on how to operate a sustainable risk management.
What are the risks in procurement?
For professional risk management, the risks in procurement should first be identified. Experience shows that a holistic identification of risks is most promising with regard to the following risk types:
- Supply risks
- Supplier default risks
- Quality risks
- Price risks
- Compliance and sustainability risks
In principle, procurement risks include all potential events that do not run according to plan and could have a significant influence on pricing, security of supply or quality. More detailed information can be found in our white paper.
The risk management process
In November 2019, INVERTO conducted its fifth annual survey to determine the status quo of risk management in procurement. The current survey, in which over 60 experts participated, shows the importance and deficits of risk management. The white paper explains in four steps how a professional risk management process should be structured:
1. Risk Identification
Identification of potential risks
2. Risk Assessment
Assessment of the probability of events occurring and estimation of possible effects on the company’s performance
3. Risk Monitoring
Keep all risks under observation and take appropriate measures if there is a threat of a deviation from the target
4. Risk Management
Application of strategies to make risks controllable
- Key questions on risk identification, risk assessment, risk monitoring and risk control
- Effective risk prevention measures
- Recommendations for action to optimize your risk management
- INVERTO Service Portfolio Risk Management
To receive the INVERTO Risk Management Study 2020, please fill out the form: