How to identify procurement risk

by Stephen Ashcroft, June 14 2013, Supply Management

Risk mitigation strategies lie at the heart of corporate governance. What is the contribution to these mitigation strategies from the procurement and supply chain management function? It is rare to find robust methodologies in place that will, in a structured way, identify the potential risks that exists in contracts with third parties. A failure to manage the risks leaves the organisation vulnerable to reputational damage, disputes, threats to service performance and diminishing profit margins.

Contractual risk is one such key area. There are organisations who have not reviewed their contractual terms and conditions for many years. There are others who trade on the suppliers’ terms, or worse still, trade without formal written contracts in place. Continue reading…


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