You own your supplier risk

Procurement professionals must take responsibility for their supply chains and implement a strategy that mitigates risk, leaders agreed at the recent CIPS Business Briefing on strategic sourcing. 

It is vital that you know your major direct suppliers – don’t just rely on tools to mitigate risk, such as sustainability, said Alex Jennings, CPO at international packaging company DS Smith. “If you’ve got £100m spend with someone then you need to know what they are doing and have a close enough relationship to control that.” 

Tailor strategy on a local and global level. Configure your supply chain in relation to the market, and consider situations such as political instability, said Rob Alexander, CPO for EMEA at commercial real estate services firm JLL. Because cleaning companies are rarely global, he said, JLL develops these supply chains nationally.  

Act early when localising supply chains, said Aysegul Sabanci, group head of procurement and supply chain at engineering firm ISG. Training, and apprenticeship development may be needed to upskill workers and support suppliers on carbon emissions and risk management, she said.

Act immediately on incidents of violations of social and environmental standards, said Jennings, to invoke a culture of change. “If we continue to allow suppliers to get away with things, to push it under the carpet because they’re cheap or we like their product or service then we are all guilty. We own this problem.” 

Identify the challenges of the culture or language of the country to adapt and support suppliers. Ultimately it is strong relationships that enable you to work with vendors to tackle issues that go into CSR, the speakers agreed. 

CIPS Business Briefings

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