A Short Guide to Procurement Risk

by Richard Russill

Overview

Increasingly, top executives view supply markets as sources of competitive advantage and as means of achieving strategic objectives. Procurement is the management activity that makes this happen, and this process depends on a superior risk management capability if it is be effective. Yet, despite its importance, Procurement Risk Management is surprisingly under-developed. Recent Global Risk surveys have pinpointed Supply Chain Vulnerability as one of the four key global risks for the next decade. What is less well known is that this is only half of the story ... risk exposures also exist inside the company and can be just as damaging. No company is an island; it needs suppliers as well as customers. Conventional wisdom puts great emphasis on managing certain aspects of business such as customers; operations; strategy and finances. Typically, however, much less regard is paid to external suppliers and the risks present in dealing with them. As a minimum, suppliers are the sources of materials, services and expert attention which enable the company to feed its business model. When done well, a risk-aware procurement process provides the bonus of competitive advantage, with the ability to capitalise, on the occurrence of unexpected events. This short guide explains just how to do it. Each chapter explores the topic in hand, outlines the risks and the remedies available and offers guidance on the principles and risk prevention.

Product Details

ISBN-13:	9780566092183
Publisher:	Taylor & Francis
Publication date:	05/07/2010
Series:	Short Guides to Business Risk
Edition description:	1
Pages:	132
Product dimensions:	5.40(w) x 8.40(h) x 0.30(d)

About the Author

Dr Richard Russill operates internationally as an adviser, presenter and writer on business issues, particularly in the areas of supply cost- and relationship- management. Success in these areas enhances profitability and also stimulates the dynamism and purposefulness of company performance overall. His work with companies across all business sectors, public and private, large and small, complements his direct management experience with a global company in production, project management, industrial relations, negotiations, organisational development, engineering, and procurement. Richard has published widely, is co-author of the negotiation handbook It's A Deal, and author of Purchasing Power. He advocates the emerging idea of RROI: Renewable Return on Investment; is creator of the Centre-Led Action Network organisational concept ('CLAN'); and is widely-known internationally as a speaker on this and other business issues. He has advised the Juran Institute in Europe as facilitator for their international procurement best-practice benchmarking process, and is a visiting lecturer on negotiation for the MSc programme at Hong Kong University. In late 2002 Richard was honoured by the Chartered Institute of Purchasing and Supply in receiving the prestigious Swinbank Award for his 'outstanding contribution to the profession' and for carrying its message into the business community at large.

Table of Contents

Contents: Introduction; Procurement and risk - the big picture; External dependencies; Market conditions and behaviours; Procurement process; Management controls; Handling the unexpected; Procurement risk management - an integrated approach; Index.

Editorial Reviews

This book calls itself 'a short guide'. It is not. It may be small on the outside but it is big on the inside. It is packed with useful information, for the procurement professional, for the supply chain manager, for the CEO, for any business owner. Even for the supply chain risk researcher, who is likely to find he exhaustive list of risks particularly useful. Truly, this book is about so much more than procurement, it is about so much more than the supply-side risks in the supply chain, it is about any kind of business and how to do your business well.' Jan Husdal, husdal.com

'I'm genuinely amazed at the breadth of risks that this little book covers...In this Guide Richard describes the journey to build good procurement risk management; what is at stake, how to describe and address it. He goes further to show how to build commitment across the wider business cross-functional team, raising the profile of the procurement process and know-how, shaping and developing expertise that actually builds collaborative working in the business. These are critical and highly valuable goals for every Senior Leader seeking to deliver sustainable value and high performing teams. Richard provides sound advice, tools and techniques based upon real case studies and significant experience which he lays out in seven easy-to-digest chapters...valuable reading to everyone whether an experienced procurement professional, newcomer or a leader, who cares about the shape and health of their business. The Guide has many practical tips including sound techniques e.g., self assessment tools and checklists but more valuably, it has many

'little gems' that make the reader reflect and think much deeper than the mechanics of a risk management process...A well thought through journey from which you will benefit from the sound advice provided by experienced and knowledgeable sources from which you can help yourself - enjoy! - Paula Gildert, Head of Development Strategic Sourcing, Novartis Pharmaceuticals, Switzerland.

'I find the book content well structured and built up. It deals with the real business dilemmas and I can easily translate and relate to our company's challenges. The language and explanations are easy to understand (even for a Norwegian). The book goes beyond the risk aspects and deals actually with "how to run procurement successfully" - which links the risk aspects well up to the total business.' - Tor Holtan, Group Purchasing Director, Jotun A/S, Norway

From the Publisher