14 April 2011 | Lindsay Clark
Only 35 per cent of organisations assess supply risk as part
of their strategic sourcing efforts, a research firm has found.
The Aberdeen Group surveyed 315 business
managers from across the globe, 72 per cent of whom were in sourcing, supply
chain or procurement, to find that risk analysis was one of sourcing’s “weak
“With a seemingly uncertain economic outlook and an increase
in geopolitical challenges today, major suppliers could face bankruptcy or
supply chain disruption issues, causing not only an increase in cost, but also
adverse effects for organisations relying on raw/direct materials for product
development,” The State of Strategic
Sourcing report said.
It found 57 per cent of organisations perceive strategic
sourcing as high value, while 60 per cent have top down directives to encourage
it to increase costs savings. Overall, the Aberdeen Group found the more
corporate spending is managed by the sourcing team, the greater potential value
supplier contracts can provide.
However, the research showed technology was sometimes
underused. Only 28 per cent are relying on data analytics for future sourcing
projects, for example.
The report compares “best-in-class” sourcing teams with the
remainder of organisations. Relative to the rest of the field, those considered
best in class have 72 per cent higher contract compliance, a 37 per cent higher
rate of spend under their control, and a 52 per cent higher rate of implemented
Organisations lagging behind in strategic sourcing should
implement spend analysis programmes, ensure procurement, sourcing, finance and
other business units collaborate, and standardise strategic sourcing processes
across the organisation, the group said.