Procurement Risk Analytics helps companies across various industries to reduce their risk exposure

Organisations globally are facing risks related to procurement due to turbulent supply markets and volatile, pan-global business environment, among other issues. The procurement risk exposure varies significantly across industries. For instance:

  • Transportation and Oil & Gas, which have high  perceived exposure  to risk due to volatile oil prices
  • Pharmaceuticals that are less exposed to price fluctuations or supplier risks

Key growth drivers of procurement risk analytics include:

  • To avoid being vulnerable to internal and external fraud or be exploited and manipulated by monopolies, cartels and hostile contractors
  • To proactively identify what is ‘at risk’, the possible event that does the damage and also ascertain the time to recover
  • To understand and manage vulnerabilities in physical supply chains due to natural disasters
  • To reduce dependency on market conditions and behaviours including supply availability, price trends and regulatory context
  • To reduce the risk of damage to brand and company reputation by unethical behaviour or incompetence

One of the cases where the use of procurement risk analytics benefited was when Nokia was able to sustain its production after a disaster contaminated millions of its mobile phone chips. Philips supplied microchips to Nokia. As a result of a fire in Philips’ microchip plant in New Mexico, millions of mobile phone chips were contaminated. After the disaster, Nokia switched suppliers quickly and re-engineered its phones to accept both American and Japanese chips to avoid a major disruption in sourcing and by contrast its profits rose by 42% that year

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