New Report Finds Procurement Leaders Prioritize Risk Management Among Most Strategic Responsibilities
April 24, 2018
A new report by A.T. Kearney and RapidRatings shows that supply chain risk management has climbed in priority among most companies, based on current geopolitical volatility. According to the research, most companies (78 percent of typical companies and 90 percent of procurement leaders) expect their procurement organizations to be given more responsibility for managing risk in the next two years.
The report, “Managing Supply Risk: Are You Prepared for a Black Swan Event?” concludes that while disruptions are inevitable, procurement is often unprepared for responding. Organizations that can quickly identify, diagnose, and resolve such issues are best positioned to proactively manage their supply chain risk. The companies that invest in risk management practices that link procurement, category, and supplier management strategies produce optimal results.
Other insights from the report include the following:
- Top 5 predictions likely to impact supply chains in the coming year
- Overview of financial health by country, supply market, and public vs. private company
- Involvement of 90% of procurement leaders in corporate risk management initiatives
- Companies’ expectation that procurement organizations will have greater responsibility for managing risk in the next two years
Carrie Ericson, vice president with A.T. Kearney Procurement and Analytic Solutions, and co-author of the study, commented, “Most organizations acknowledge that supply disruption will occur. Unfortunately, few have invested in the systems and programs needed to respond quickly and efficiently to increased geopolitical unrest and the unpredictability of natural disasters.”
The report also demonstrates, with comparison across industries and regions, how RapidRatings’ FHR® can be effectively used to analyze the financial health of public and private companies globally. It is the second time a study such as this has been published showing how combining the mega trends analysis with a micro bottom-up company and industry analysis provides procurement executives with relevant industry insights to make informed risk management decisions.
“We’re seeing companies place greater emphasis on brand reputation and operational resilience than ever before. Disruptions are inevitable, and the best way to mitigate risks in the supply chain is by fostering an agile organization armed with the right tools to select the strongest partners,” explains James H. Gellert, RapidRatings Chairman and CEO. “However, many supply management organizations report a lack in capacity, bandwidth, and technology to address potential risks. Using financial health as a KPI is the clearest proxy to see how suppliers will withstand geopolitical, economic, and market turmoil and continue to operate resiliently.”
Click here to download a copy of the report.
About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.
RapidRatings® is transforming the way the world’s leading companies manage enterprise and financial risk. RapidRatings provides the most sophisticated analysis of the financial health of public and private companies in the world. The company’s analytics system provides predictive insights into third-party partners, suppliers, vendors, customers and securities issuers. Every business conversation becomes more productive, transparent and efficient with the RapidRatings Financial Health System. For more information, visit www-staging.rapidratings.com.
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