Anyone who has ever worked on a “watch floor” or in a security operations center will know that information management is the backbone of any successful risk management operation (for those without government experience, picture the CTU on 24, but less dramatic). The judicious flow of information from those on the “front lines” who collect it, to those who can triage it, to those who can decipher or interpret it, to ultimately the decision makers (both tactical and strategic) is essentially how national military, law enforcement, intelligence, and emergency management services manage and leverage information. And in a way it is how procurement and supply management operations manage and leverage supply risk information, as well.
Although Chief Procurement Officers and their teams are not in the business of averting national disaster and saving lives, it may seem like it when it comes to managing supply risk. Ensuring the free and reliable flow of goods and services from one end of the supply chain to the other from reputable and competitive suppliers that align with the enterprise’s core mission and values is critical now more than ever. And the same kinds of tools and resources that “information warriors” leverage to expeditiously collect, triage, disseminate, and understand intelligence are used and ought to be used by procurement and supply management personnel who are tasked with minimizing and mitigating supply risk.
- Big Data Management: Today, data comes in two distinct forms – structured and unstructured. For procurement and supply management, structured data can include spend data, quantified supplier performance and risk data, accounts payable (AP) / finance data, and metadata from connected devices across an enterprise’s infrastructure and perhaps its supply chain. Likewise, unstructured data can include contract information like negotiated units, costs, schedules, service-level agreements, and terms and conditions; supplier certification, contact, and performance information; supplier risk assessments; and external information, like social media and third-party intelligence and risk information. With so many data points available from so many different sources, it is essential to employ big data management tools that can collect and organize all of the structured and unstructured data that pours into the typical enterprise. Having a platform that consolidates all of the necessary components onto one system removes the burden of having to consult six, eight, or more systems and sources to develop a holistic view of the supplier base and risk/threat landscape.
- Centralized Dashboards: To that end, centralized dashboards are fantastic resources to help supply management professionals quickly fuse all of the intelligence and inputs they receive from various sources. Supplier management dashboards exist today that allow managers to view sourcing, contract, supplier information, performance, and risk information all in one dashboard, with various tabs, header-level drill-down functionality for more granularity, and data visualization tools like charts and graphs that bring supply risk information to life. Pertinent information is auto-populated so that users do not have to manually load information every time (except perhaps for an initial data setting). Regular reporting can be set to distribute customized reports to certain users on certain days and times (like daily, weekly, monthly, or quarterly reports), while alerting features can issue “push notifications” on events that could put the enterprise at risk (e.g., a supplier contract that is about to expire, an event in a region that could have an impact on business, or a supplier unfavorably mentioned in the news).
- Third-Party Data: Internal and supplier data are bed-rock information sources on which to build a supply and supplier-risk profile. But they are not the only sources one should consider. Third-party information sources, like government data, market intelligence, and private risk analysis, can round out a CPO’s and procurement team’s understanding of their supplier base and the risks therein. Examples of third-party intelligence and risk sources include Control Risks, Dun & Bradstreet, LexisNexis, McKinsey & Company, and Risk Methods. As the saying goes, there are three sides to every story: yours, mine, and what really happened. Thus, it is essential that CPOs and their teams consult independent sources for unbiased information and analysis.
Chief Procurement Officers and the like do not have to run their supply risk management teams like Jack Bauer on 24 (that would be a little extreme, wouldn’t it?). But they do have to value the collection, management, and fusion of multiple information sources to provide themselves and their teams with a holistic view of their supplier base and the risks therein. In the digital age, where information is everywhere but intelligence is hard to discern, having the right tools and resources in place, like Big Data Management, supplier dashboards, and leveraging outside sources can make the difference between averting a crisis and having to manage it after the clock has run out.