Establish risk management processes in procurement and supply chain
From port closures, to COVID-19, to the crisis in the semiconductor market: structured risk management cannot prevent crises, but it can provide well thought-out solutions. Through transparency in the supply chain and ready-made emergency plans, companies remain capable of acting.
Flexible supply chain and long-term security of supply
Risk management has long been a very abstract concept. But recent examples in the context of the COVID-19 pandemic have shown how quickly global and widely ramified supply chains can get out of kilter. New requirements, such as those imposed by the Supply Chain Act, further increase uncertainty.
Good risk management helps to identify risks at an early stage and to counteract them with alternative plans. At the same time, it is hardly possible to avoid risks completely because they are part and parcel of entrepreneurial activity.
It means proactively identifying risks and reacting quickly. To do this, companies need an early warning system that includes all levels of their own supply chain. We support you in professionalizing the risk management process in your company and implementing effective measures.
/ Risk Management Process
Risk Identification
Identification of all potential events that might not run as planned and have a significant impact on pricing, supply reliability or quality.
Risk Assessment
Assessment of the probability of events occurring and evaluation of their potential impact on the company’s performance. Tests run for emergency situations.
Risk Monitoring
Monitoring all risks and taking appropriate action against any impending deviation from targeted objectives. Setting up a risk control tower in order to be able to act quickly.
Risk Management
Implementation of strategies to make risks manageable: Risk prevention, risk taking, risk spreading and risk transfer.
Our service modules for optimizing risk management in procurement
In many companies, the potential of active and strategic risk management has not yet been sufficiently implemented. We help you identify and implement professional risk management.
After a performance check, we develop the necessary processes and procedures together with those responsible from your company. This includes long-term preventive measures and the implementation of a modern reporting system for proactive risk management. In addition, we can also support you in taking short-term measures to minimize risks.
KGM Strategy service modules for optimizing risk management in procurement
We analyze the current contribution of your procurement function to minimising risks. Based on the results, we derive concrete measures to increase performance in order to position your procurement as a strong partner within your overall organisation. The risk management performance check also forms the basis for the strategic development and implementation of effective optimisation programs in risk management.
We identify weak points in your supply chain by creating transparency about your inventory suppliers and providing you with tools to identify insolvency risks of your suppliers at an early stage. In doing so, we do not rely exclusively on self-reporting but include various data sources in the analysis. Based on the data collected, we estimate the insolvency risk for each individual supplier and classify them into risk levels.
Based on the Supplier Health Check, we design and implement an individually tailored Supplier Risk Management System for you so that you can minimise default risks in the future. The system ensures regular supplier assessments and has early detection mechanisms. In addition, we define concrete action plans for each risk level.
We analyze which commodity groups in your company are particularly susceptible to risk and in which areas failures should be avoided at all costs. Based on this, we then prioritize and create procurement strategies for the individual commodity groups with which you can keep supply risks to a minimum. Together with you, we then identify the relevant procurement markets and suppliers and conduct tenders and negotiations. As a result, you have a restructured supplier base and sustainably optimized procurement.
Our risk management experts
Our risk management insights
LinkedIn pulse article
Four-stage strategy to combat the threat of supplier insolvency
The ongoing economic downturn, structural challenges and tighter financing conditions mean that an increasing number of companies are having to file for insolvency.