Supplier compliance is a potential liability for procurement teams everywhere, and will undoubtedly remain to be so, given the unpredictable nature of human beings. Although it is understood that we simply cannot predict and avoid every single negative situation possible, there are many ways to minimize your business’s risk of dealing with a non-compliant supplier. At the Institute for Supply Management annual conference, associate vice president at SAI Global Kirsten Liston said: “There is a burden of proof for the company as a whole, the business unit as a function, and the people in it, to say what could go wrong? What is going wrong that I am not asking the right questions about? And how do I find that out?” Through these words, she identifies the entire company’s ongoing responsibility to think out of the box when identifying risky suppliers, and not just that of those of us in supply management.
She provided purchasers with a few helpful tips to promote healthy supplier compliance, which you can find here on supplymanagement.com. What caught my attention was the second tip listed: “Target and segment suppliers by importance and compliance risk. There are a lot of companies out there that have a pretty minor supplier in a high-risk country. That supplier is not crucial to the company, so it should think hard whether it wants to be associated with that vendor at all. Is there somewhere else we can get the goods or service that avoids this troublesome relationship?” This is an important point to consider. Your first thought in evaluating this minor supplier might be just that – that it’s minor, so why worry? But no supplier is too small, and no worry is too minor when considering supplier compliance. Liston’s advice to try and seek these goods or service elsewhere is merited. Even though the supplier is minor, why not eliminate all identified sources of potential risk, in order to be best prepared for any unknown risks that may sprout up?
Ultimately, whether or not risks like these are worth taking is entirely up to you and your business. What do you think? Would a minor vendor in a high-risk country warrant serious consideration of alternate supplier options? Or would you be content, given its non-crucial status?
The Link Between Procurement Staff and Police Officers
For as long as I can remember, I’ve considered myself a reader. In high school, I solidified my “reader-ism” by way of public display; between periods, I was known to traverse the hallways grasping an open copy of Tolkien’s The Lord of the Rings, or Mario Puzo’s The Godfather. I admit that this may not have been the most practical approach to my comprehension of these texts, nor the most effectual means of travel. Regardless of the shortcomings of my methods – a reader I was. Many readers are blessed with an uncanny ability to remember certain phrases, and I was no exception to this rule. One of the first, initial lines that I stored in the vast reserve of quotes, idioms, and sayings – that I now refer to as my memory, was the common phrase: never judge a book by its cover. Despite this line’s place among a long list of English clichés, its validity has proved itself time and time again throughout my years. This morning, I was once again reminded of that simple phrase’s truth.
During my daily search for informative, original articles relevant to procurement I stumbled upon a hidden gem of a post, entitled Procurement: To Protect and Serve. After reading the title, for one reason or another, instinct beckoned me to press on with my search. Thankfully, my mind stumbled onto that somewhat juvenile phrase: never judge a book by its cover. So I decided to finish the read. To say that I was pleasantly surprised would be a gross understatement.
Through his unique perspective as a Boston native, writer Pierre Mitchell draws a strange comparison between procurement staff and members of the Boston Police Department, in lieu of the tragic bombing that took place at the Boston Marathon. He describes that during the manhunt for the alleged suspects of this heinous crime, that “The police were no longer overweight beat cops with dour attitudes and bureaucratic power. They were now one of us, and looking out for us.” Skipping ahead to avoid any potential disservice that Read more