CPO Rising has been actively publishing thought leadership, technology analysis, and supply management best practices for many years and the result has been a steady stream of valuable content that sometimes gets lost in the shuffle. To help our readers keep better track of our ideas on certain topics, we’ve developed a new series in which we will feature a sampling of impactful insights and recent articles on the topics that matter most to CPOs and other procurement executives (Note that readers can also search different categories by clicking on “Articles” found in the blue menu bar directly under the CPO Rising logo or by searching “Tags” under the sponsor logos on the right hand navigation bar). We’ll start with Strategic Sourcing topics as we are now hard at work on our annual report on this topic….
4 More Supply Risk Management Articles You Should Read
1. Three Supply Management Lessons Learned from the Great Carnitas Shortage of 2015
From our article entitled Three Supply Management Lessons Learned from the Great Carnitas Shortage of 2015: In mid-January, many news outlets reported that Chipotle Mexican Grill (NYSE: CMG) had stopped serving its popular carnitas product at roughly a third of its 1,724 restaurants because it dropped one of its pork suppliers that did not meet its “Food With Integrity” standards. According to Chipotle’s website, its pork suppliers must allow their pigs to have access to outside spaces or place them in deep-bedded pens where they can move around and exhibit “natural tendencies.” They must also avoid using any antibiotics or growth hormones in the development/treatment.
When Chipotle officials discovered that one of its suppliers was not adhering to these standards during what the Associated Press calls a “routine supplier audit,” it removed the source from its supply chain. But, because this supplier made up such a large share of Chipotle’s pork supply, and because it was unable to line up alternative sources in time, Chipotle decided to pull its popular carnitas product from nearly 600 of its restaurants. Although Chipotle says that it is working with other suppliers to increase their pork supply and that it is open to reinstating the ousted supplier if/when it complies with Chipotle’s animal welfare standards, the popular fast-casual Mexican restaurant chain does not know when it will be able to put carnitas back on the menu at all of its franchises. Read more about this two-part series by clicking here.
2. On Cotton: Understanding Risks in the Global Supply Chain
From our article entitled, On Cotton: Understanding Risks in the Global Supply Chain: Dressed to Kill? is a recent report that closely examines the depth and breadth of unethical and unsafe labor practices, particularly in the global cotton and textiles industries. The report was a joint research effort by LexisNexis, Stop the Traffik, and Finance Against Trafficking; Ardent Partners reviewed the report’s findings in two earlier articles, which readers can find here and here. While this report focuses on cotton and textiles, unethical labor practices and similar issues may be impacting other supply chains today. As a result, today’s article discusses the implications for Chief Procurement Officers and their supply management teams, who may have to mitigate supply risks associated with not just cotton and textiles, but other commodities that are traded globally. To read more about this four-part series, click here.
3. Supply Risk Roulette
From our article entitled, Supply Risk Roulette: I began this article with the premise that supply risk was a lot like roulette simply from the standpoint that there is an element of risk in playing and that expecting to “win” simply by tracking what has happened in the recent past is not a wise strategy. There are macro factors that can and do override history and recent trends (companies with great histories and strong balance sheets, after all, do sometimes fail). But unlike roulette, supply risk is not a passive sport – it is something that is much more nuanced, where the odds can constantly change and different strategies are better for different scenarios. Read more from this article by clicking here.
4. Chief Procurement Officers in 2014: Procurement’s Convergence with Supply Risk Management
From our article entitled Chief Procurement Officers in 2014: Procurement’s Convergence with Supply Risk Management: In Ardent Partners’ most recent survey, 59% of sourcing and procurement leaders said that supply risk management has become a new responsibility for them in the past five years. We attribute this convergence of responsibility to two things: (1) supply risk management is frequently and generally regarded as a traditional procurement process, and (2) when a supply risk management program is initiated, procurement is best positioned to manage it given its influence and reach across all stakeholders, both internal and external. As a result, more and more CPOs and their procurement teams are the ones to work with AP/Finance, HR, IT, Legal, Regulatory Affairs, and the supplier base to identify, prioritize, and mitigate a whole host of risks for the organization. These risks can include business continuity, financial, operational, reputational, regulatory, or political risks. To read more about this article, click here.
