The rapid pace of change, coupled with uncertainties in today's business environment often lead to gaps between enterprise plans and actual performance.
Sudden disruptions in supply chain can expose a company to costly and, at times, disastrous delays. To fix these gaps in planning, performance and accountability, supply chain organizations should adopt a “take-charge” approach towards third-party risk management.
A ”take-charge” approach to third-party risk management focuses on managing risks and performance consequences by enabling the management to plan for organizational performance within identified potential outcomes.
To implement a “take-charge” third-party risk management approach, supply chain organizations must take a few preliminary steps. First, an organization should develop a formal due diligence process to gather data and analyze it. It is important to create a reporting tool from the extracted data to structure forward planning/demand scenarios, thus helping the management to assess business risk strategies and record their performance across potential outcomes. Next, it is important to define — in your policies and procedures — the overall planning and implementation Project Management Office (PMO) processes utilized to support the risk management system design, evaluation, and optimal implementation of plans and strategies that support potential supply/demand outcomes.
Last, but not the least, a process needs to be put in place for program compliance with associated roles and responsibilities, accountability and authority, to set and measure performance objectives against agreed levels of financial outcomes. This ensures that the “take-charge” risk approach is viewed by everyone in the organization as a strategic imperative to help best meet management objectives.