In Part 1, we covered critical steps in the risk assessment process and guidelines for contingency planning. So now let’s move on to the ongoing, day-to-day process and approach that will help reduce risk AND prepare you for the inevitable challenges that arise in a global supply chain.

Manage your Suppliers. Managing a global supply base can be challenging. Many companies have large numbers of suppliers to contend with. Their data is fragmented and spread across multiple systems. And goals, metrics and measurements are inconsistent - if they exist at all. But there are steps that you can take to overcome these obstacles.

• Avoid critical supply problems through pro-active collaboration with your key suppliers
• Rollout performance measurement processes to measure supplier performance consistently in a good recurring cadence
• Award more business to high performers based on quality, timeliness and other key performance indicators
• Ensure that future sourcing activities take performance and quality into account
• Manage more suppliers using automated processes and scoring /analysis tools
• Give suppliers visibility into performance issues and quality problems so that they can act swiftly to correct them

Again, much of this can be automated through technology. But technology alone isn’t the answer. To effectively manage your trading relationships and get the information you need to make better business decisions requires market knowledge, category expertise and best-practice processes. Find a partner who can provide it.

Be realistic. Companies today face more supply risks and challenges than ever before. So don’t think it can’t or won’t happen to you. Protect your company by knowing your risks and identifying the right combination of technology, expertise and services to effectively manage and overcome them.

If you need additional guidance, I recommend visiting our Supply Risk website, which contains a recent CPO Agenda report, risk assessment tools and video interviews with several companies describing the role procurement plays in their risk management strategies.

Sundar Kamakshisundaram is a Senior Solutions Marketing Manager for Ariba, a global provider of spend and supply risk management solutions.