Biggest Procurement Risk Factors and How to Avoid Them
Every year uncovers new challenges in procurement. Terrorist attacks, natural disasters, increasing regulation, and mystifying new technology make accurate predictions almost impossible. The following are some of the greatest challenges we are looking out for and our recommendations for overcoming them.
Procurement Challenges & Solutions
Disruptive Technologies
New technologies may seem like an advantage, but if they are not properly vetted they can become a major challenge.
With the Industrial Internet of Things (IIoT) taking advantage of increased computing power and cheaper data storage, edge computing and 5G technologies are able to take the need for processing away from the central office and perform real-time work in the field.
These new devices, however, also bring with them potentially new gateways for cyber attacks, which can disable these networks and potentially put confidential data at risk.
This ability to segment data with these new edge computing technologies can offer specific solutions to these challenges though, specifically the ability to make adjustments in real-time to avert such risks, while also increasing levels of overall visibility.
As data and critical decision frameworks move to the edge of your network, it's vital to make security a core part of your decision matrix.
Stakeholder Education
It can be surprising that one of the greatest challenges in procurement comes from within. As more sophisticated technology is integrated, systems become harder to understand for the layperson. Unfortunately, that lack of clarity in customer service and sales can be very obvious to the customer.
As the supply chain becomes more dynamic and is better able to respond to risk, stakeholders should be trained in how to communicate that value proposition to customers.
This investment in robust systems isn't just cost-saving, it can also be a way to segment the business in the marketplace for greater reach. It will mean little though if those systems can't be readily explained or utilized.
Geopolitical
The upcoming election in 2020 will have many outcomes, including either a deeper entrenchment in current economic and regulatory trends or a turn in the opposite direction. Additionally, terrorist threats are causing increased security protocols and the closing of some international borders.
Geopolitical risks are difficult to predict but can be mitigated through careful consideration of key locations and monitoring local news. Supply chain managers should be not only tracking just where the risks are occurring - and the extent of damage and time - but also the ability to assess the impact on the customer.
Natural Disasters
While globalization can help increase marketshare and overall profitability, it also opens up the supply chain to new dangers. Natural disasters are increasing in both frequency and severity. The immediate shutdown of highways, flights, and ports can physically lock products. Electrical and communication outages can make it near impossible to get critical information timely.
With real-time access to data, properly vetted artificial intelligence can make fast suggestions to re-route supply chains, using multiple sources of information. Where once we may have had to rely on trailing indicators, such as a phone call from a driver or an email from a manager, we can now tie into leading indicators through API services to make changes as events unfold.
Solutions You Can Use
While there will always be challenges to procurement, you don't have to discover them on your own. Join us at ProcureCon West to meet the finest minds who are identifying procurement solutions that you can incorporate into your business!