GOVERNANCE & PROCESS
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
112
Figure 3.14. The proportion of companies reporting that robust risk management is in place for their key suppliers – all respondents
RISK MANAGEMENT
This is the first year we have asked a specific question about risk management: ‘for what proportion of your key supplier group would you consider you have *robust risk management in place?’ Unlike the shortfall in contract and performance management, this result is not unexpected. Risk management has long been an area that organisations have struggled to maintain post contract, and this situation is simply confirmed by our findings. Only 38% of companies believe they have robust risk management in place for more than half of their key suppliers. In most organisations with a reasonably well developed category management and strategic sourcing capability, a risk assessment is conducted as part of the sourcing process and is taken into account when the sourcing decision is made. If organisations are following their own procedures, there should also be an analysis of residual risk, and appropriate contingency and business continuity plans put in place. The challenge comes post contract. Who is responsible for ongoing risk management? What processes do they follow? What information and technology is there to support them? Amongst the leading companies the situation looks a little better, with 63% reporting a good level of risk management in place for over half of their key suppliers.
10% 15% 20% 25% 30%
0% 5%
76% 100%
51% 75%
26% 50%
0 25%
DON’T KNOW
© 2014 State of Flux
Figure 3.15. The proportion of companies reporting that robust risk management is in place for their key suppliers – leaders / fast followers / followers
10% 15% 20% 25% 30% 35% 40%
○ LEADER ○ FAST FOLLOWER ○ FOLLOWER
0% 5%
76% 100%
51% 75%
26% 50%
0 25%
DON’T KNOW
© 2014 State of Flux
FOUNDATIONS OF SRM – AN INDUSTRY SECTOR PERSPECTIVE
Figure 3.16. The proportion of companies reporting that robust contract management is in place for their key suppliers – industry sectors
○ 76% 100% ○ 51% 75% ○ 26% 50% ○ 0 25% ○ DON’T KNOW
0% 10% 20% 30% 40% 50% 60%
FINANCIAL SERVICES
MANUFACT URING
OIL AND GAS
FOOD AND BEVERAGES
IT / HIGH TECH
UTILITIES
PUBLIC SECTOR
HEALTH CARE
PROFESSIONAL SERVICES
AUTO MOTIVE
© 2014 State of Flux
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