Procurement is an information game, with the best-informed organizations able to optimize sourcing and their supply chains, as well as minimize disruptions from incoming materials. And thanks to technology, gaining information on supplier performance and potential disruptions is no longer such a time-intensive task. In fact, it’s now feasible for organizations to maintain visibility into supplier operations at even the second and third tiers, which ultimately leads to better informed procurement decisions and risk management.
From APQC’s Sourcing and Procurement Blueprint for Success, this article details the importance of tracking second- and third-tier suppliers, as well as expanding supplier relationship management in pursuit of risk management. These findings are supported by APQC’s Open Standards Benchmarking results and a real-world example.