On the surface procurement may not appear to be a risky profession. But as spend values increase, supply chains lengthen and the demands on buyers grow, the opportunity to make a cock-up that has serious repercussions – and in some cases might even bring down your business - becomes ever greater.
And that’s only the obvious risks you can mitigate, such as a supplier failure or natural disaster – what about those problems that even “experts” fail to predict (the financial crisis springs to mind)?
I’m certainly convinced buyers spend less time thinking about risk than they should, finding itself way down the priority list after cost, quality, time and even things like sustainability.
It may be difficult for purchasers to balance competing priorities, but in my view risk should be the number one concern of every buyer out there.
If procurement is expected to take a broader view of the way its decisions affect the wider business, surely the first consideration should be: “If something goes wrong, what will the damage be?”
Apologies for starting the week on a downer, but you can console yourself with the fact SM will be publishing a guide to building a framework for risk management in our issue out this week.