Gatekeeper ’s Post

What are some common risks in procurement? Common risks in procurement include: 1. Supplier failures 2. Price fluctuations 3. Quality issues 4. Delivery delays 5. Data security breaches 6. Non-compliance with regulatory requirements. 7. Geopolitical factors 8. Natural disasters 9. Market volatilities can also pose risks to the procurement process. Share with me your thought in case if I missed any?

Every now and then (and seemingly more often as of late) a crisis will hit. And it’s important that, when it does, everyone – including procurement – reacts quickly and decisively. Often this urgency means ad-hoc purchasing agreements. My issue with this is that it’s not a proactive means of dealing with a crisis. Reactive strategies such as ad hoc or emergency purchasing leave businesses vulnerable to price gouging, hoarding, and supply shortages. There is also a risk of ignoring protocols, regulations, laws, or even your own ethics when doing so. We must, therefore, plan for these moments... 1. Effective crisis management requires collaborative planning with suppliers so be sure to include as many stakeholders as possible. 2. Aim for a win-win negotiation to ensure your crisis plan benefits both you and your suppliers. 3. Negotiate retainer agreements for essential items or services to ensure you have priority access during crises. When crises hit, we don’t want to be left overpaying and being undersupplied. What else would you add here? #Procurement #SupplyChain #RiskManagement

𝗡𝗲𝗮𝗿𝗹𝘆 𝟳𝟱% 𝗼𝗳 𝗨.𝗦. 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲𝗱 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗱𝗶𝘀𝗿𝘂𝗽𝘁𝗶𝗼𝗻𝘀 𝗶𝗻 𝟮𝟬𝟮𝟯-𝟮𝟬𝟮𝟰. Disruptions like these have exposed vulnerabilities, and companies are looking for ways to build resilience. A strong #procurement strategy is your first line of defence. Here's how to get it right: ✅ 𝐄𝐦𝐛𝐫𝐚𝐜𝐞 𝐌𝐮𝐥𝐭𝐢-𝐒𝐨𝐮𝐫𝐜𝐢𝐧𝐠: Don't put all your eggs in one basket. Develop relationships with multiple qualified #suppliers. This spreads your risk and protects you from unexpected outages at a single source. ✅ 𝐂𝐨𝐧𝐝𝐮𝐜𝐭 𝐃𝐮𝐞 𝐃𝐢𝐥𝐢𝐠𝐞𝐧𝐜𝐞: Cutting corners on supplier vetting can be disastrous.  Investigate a potential partner's track record, financial health, and compliance history. Are they transparent about their operations and ethical sourcing practices?  This upfront effort can save you significant headaches down the road. ✅ 𝐓𝐚𝐤𝐞 𝐏𝐫𝐢𝐜𝐞 𝐇𝐢𝐤𝐞𝐬 𝐈𝐧𝐭𝐨 𝐂𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐚𝐭𝐢𝐨𝐧: Unforeseen price hikes can eat into your profits.  Factor in potential cost fluctuations during negotiations, and consider fixed-cost contracts where appropriate. ✅ 𝐍𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐞 𝐰𝐢𝐭𝐡 𝐂𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐜𝐞: Contracts are the foundation of any procurement agreement. Don't just accept the first offer. Negotiate contracts that are fair and protect your interests.  Clearly define payment terms, delivery schedules, and #qualitycontrol standards. Include clauses that address potential disruptions and risk mitigation strategies. What are your best practices for building a strong procurement strategy? Share your thoughts in the comments! For more quality control updates, industry insights, and job opportunities, follow Tetra Inspection.

One of the uphill battles that Sourcing/Procurement professionals face in their efforts to expedite projects is the time it takes to get Legal, Finance, Security, and any other department's sign offs. And from my experience, Sourcing takes the hit for the lack of expedience shown by these partners. We can go into the reasons why they are slow (not well funded, etc) but I'll save that for another post. In response to these approval challenges, stakeholders get frustrated and change their behaviors in ways that are suboptimal for the company. I recently audited an RFP that had been done three years ago. The RFP participants seemed strange given the solution we wanted. Some of the participants didn't provide the solution and worse, those same participants were being suggested for this year's RFP. The stakeholders were only including suppliers who had an in force Master Services Agreement. Those who had an MSA but didn't provide the service themselves were expected to find a third party to partner with. This was done to avoid some of the approval chain. If you're in Sourcing, you should hear alarms going off. If you care about supplier diversity, you should also hear alarms. The impact of poor internal (Legal, Finance, IT Security) can have consequences which are much worse than just frustrating internal stakeholders. I'd love to hear from Sourcing/Legal/Finance/IT Security professionals on the challenges from their perspective and possible remedies.

Step 8 of 10: Procurement Negotiations CHECKLIST: MAKING STRATEGIC THREATS! Get All at... https://lnkd.in/gJDUfkts Complete with a Description, When to Use and When to Avoid! You Have a License to Use this at Work as You See Fit. Tap/Click the link in the comments to download the template with all 10 STEPS. #procurement #negotiations #procurementnegotiation #winwin

Switching suppliers post-contract termination poses inherent risks and challenges in procurement. ----------- Here's a glimpse into key considerations: --------- Supply Chain Disruptions: Transitioning to a new supplier might lead to disruptions in the supply chain, impacting production and delivery schedules. -------- How do you mitigate these risks without affecting operations? >>>>> Quality Assurance: Ensuring the same level of quality or better from the new supplier demands rigorous assessments and validations. ----------- How do you guarantee seamless quality transitions? Contractual Obligations: Addressing contractual obligations with the former supplier while onboarding a new one requires careful negotiation and adherence to legalities. --------- How do you manage this transition smoothly? >>> Relationship Building: Building a rapport with a new supplier takes time. How do you cultivate effective relationships while swiftly addressing immediate procurement needs? --------------- Cost Implications: There might be unforeseen costs associated with transitioning to a new supplier. How do you anticipate and manage these financial implications? ---------- Navigating these risks demands meticulous planning, robust risk management strategies, and collaborative efforts across teams. ---------------------------------------------------- What other challenges have you encountered when switching suppliers? Let's share insights in the comments below! #SupplierSwitch #ProcurementChallenges #RiskManagement #SupplyChainEfficiency

More than ever before, organizations are adopting holistic, process-driven vendor management. They are evolving vendor management from a mere compliance function to a strategic driver of measurable value by: ✳ Identifying and mitigating third-party risks 📈 Improving quality, reliability and overall vendor performance 💲 Reducing and optimizing vendor spend 😎 Making it easier to find and contract with vendors Getting this type of value can't be done haphazardly. It requires taking a strategic, process-driven approach to vendor management. If you're looking for ways to create value from vendor management in your organization, check you my latest blog where I break down some of the best opportunities. 👇 https://bit.ly/3OSXzi4

Great tips when you make negotiation with suppliers

Kickstart 2024 with effective procurement strategies to tackle supplier risk. Discover how transparency, proactive measures, and technology can transform your procurement process. https://bit.ly/3HcMJPE #StrategicSourcing #Procurement #SupplierRisk

Procurement and Sourcing teams typically manage thousands of products and materials. The more product and material you manage, the greater the chance of an issue popping up at any given time. Here are six buckets of risk to proactively check for up front to save yourself some time and money later: 1. Long lead times 2. Single sources of supply 3. Overlaps in tier 2 suppliers 4. Dependence on specific ports, transportation mode, or Info Systems 5. Potential bottlenecks for material flow 6. Areas where failure would take significant time to resolve What techniques have you used to proactively mitigate risk? #supplychain #risk #strategy #procurement #sourcing