By applying effective risk management, delays in the supply chain and added costs can be avoided, allowing the establishment of solid relationships with reliable suppliers, and ensuring the quality of the products and services bought.
Risk management starts with the identification, evaluation, and mitigation of threats associated with purchasing processes that allow predicting obstacles and making informed decisions to minimize negative impacts. Thus, the implementation of proactive strategies, the ability to react to problems, and the acquisition of qualifications such as TECH’s Professional Master’s Degree MBA in Purchasing Management supply a competitive advantage in the market by deepening the management of potential risks.
Procurement management helps to reduce the risks associated with an organization’s procurement processes, expecting potential obstacles and minimizing negative impacts. In addition, it allows the protection of organizational reputation by predicting risks related to suppliers, product or service quality, and regulatory compliance and social responsibility.
This provides a solid basis for strategic decision-making, prevents unnecessary costs, and protects the organization’s reputation by effectively addressing risks, facing challenges with confidence, and taking advantage of opportunities to achieve business excellence.
Strategies that generate efficiency
Risk management supplies important benefits for organizations, such as predicting obstacles and minimizing negative impacts on procurement. For example, if a company faces a shortage of raw materials due to a natural disaster and has adequately managed the risks, it can implement a contingency plan or seek alternative suppliers to keep business continuity.
It also promotes cost optimization by assessing and mitigating risks associated with suppliers, contracts, and delivery terms. This enables the organization to make informed decisions that maximize value and minimize costs, such as setting up contractual agreements with long-term fixed-price clauses that supply stability and predictability in procurement costs, reducing the risk of fluctuations in market prices.
Finally, it shows solid and reliable relationships with suppliers by assessing their ability, regulatory compliance, quality, and reliable delivery, minimizing disruptions in the supply chain, and ensuring the availability of necessary products or services. Thus, by assessing risks, a company avoids partnering with suppliers of low quality or with a history of contractual non-compliance, ensuring a solid and reliable business relationship.
Towards integrated risk management in purchasing management
The latest trends in procurement risk management focus on improving the ability of organizations to anticipate and reduce them, highlighting the use of advanced technologies, such as data analytics and Artificial Intelligence (AI), to accurately identify and assess risks in real time. This enables informed and proactive decisions based on relevant supplier data, market conditions and regulatory compliance.
Another important trend is the integration of risk into all stages of the procurement lifecycle, from planning to performance evaluation, which involves considering aspects such as sustainability, corporate social responsibility and environmental impacts, and promoting collaboration between internal departments to address risks effectively.
In addition, there is a growing focus on cyber and information security risk management in procurement due to increased digitization and interconnectedness of systems, as organizations face sophisticated risks such as cyber-attacks, data breaches, and security vulnerabilities. Therefore, it is necessary to implement robust security measures and adopt specific risk management practices to address these challenges.
TECH Technological University
TECH Technological University is the largest digital university in the world, recognized by Financial Times among the 200 fastest growing companies in Europe and noted for its fully online approach that allows education to students from all over the world.
Its international trajectory has made it a benchmark in distance learning, offering an extensive catalog of more than 10,000 educational programs, as each year more than 100,000 new students join this educational community that has more than 500,000 graduates from more than 150 countries.
Also, it has successfully combined technology and education, supplying accessible, quality learning opportunities at a global level. Its digital approach has ended geographic barriers, allowing it to offer innovative education to a wide range of students.
