Procurement must keep a continual eye on not only its organization’s forecasts and inventory drivers but also its suppliers’ production capacity and constraints. This includes seeking visibility into suppliers’ end-to-end processes. Insight into suppliers’ operations enables procurement to quickly react to disruptions or even pre-emptively mitigate them. Although technology can now better support this traditionally time-intensive responsibility, it’s still vitally important for procurement to institute an infrastructure to ensure a systematic approach.
From APQC’s Sourcing and Procurement Blueprint for Success, this article details the importance of systematically mitigating supplier-related risks using a solid governance structure and regular supplier reviews/audits. These findings are supported by APQC’s Open Standards Benchmarking results and real-world examples from top performers.