With all the news about product recalls - from peanuts to lead tainted toys - and economic uncertainty, there’s been substantial conversation over the last year-plus about the importance of implementing a robust and comprehensive Supplier Performance Management (SPM) system. While this has been on company’s “wish lists” for some time, the confluence of factors we’re facing now only heightens the need to get started.

I contributed to a white paper that lays out the benefits, risks and Critical Success Factors (download the PDF version here) of SPM. While the benefits discussion usually centers around improved supplier collaboration, better visibility, expectation setting and the like, the recent headlines point to one seldom-quoted benefit that can’t be underestimated…

This month’s headlines about (alleged) deliberate distribution of tainted peanut butter highlight the critical need for adequate records and a “paper trail” of expectations, reporting and testing so that, if something does happen within your supply chain, you will be able to support the inevitable litigation activities that follow.

While some might call it a glorified CYA file, I’d lean more to CYB (Cover Your Brand). Bad stuff happens. Be prepared.

Kris Colby is a Director in Ariba’s Spend Management Services group. Kris specializes in strategic sourcing and risk reduction with retail and CPG companies.