Heiko Schwarz, Co-Founder and Managing Director of riskmethods, and Georg Rösch, Vice President of Direct Procurement Product Management at JAGGAER, discuss the multiple implications of supply chain disruptions and maintaining procurement’s value generation in 2019, on the latest edition of JAGGAER’s InsideSpend webinar and podcast series. JAGGAER is the world’s largest independent spend management company and riskmethods empowers leading enterprises with an award-winning supply chain risk management solution. This webinar is designed to provide actionable intelligence and insights for Chief Procurement Officers, VP’s, and Directors and Managers of procurement locally and globally.
Todays’ manufactures face multiple challenges that have increased supply chain risk, resulting in loss in revenue. Any compromise in delivering goods to the customer, paired with an increase in supply side costs, and the possible need to add new suppliers, collectively injures profitability. Adding an unforeseen supply chain disruption to the equation increases potential revenue damage. A recent survey from Zurich Insurance and Business Continuity Institute showed that two thirds of the surveyed enterprises had at least one supply chain disruption in the past twelve months, with 15% of the enterprises reporting more than 6. These challenges will continue to grow in 2019 as a result of shifting supply chains and increased global tensions.
“Not being able to deliver the product or service to the customers might lead to loss in revenue, loss in market share and increased cost, because the logistics eat up the savings that procurement was generating in the fiscal year. There might be long-term reputational damages as well, with the competition taking business advantage. So that combination of the consequences might hit a company seriously. Some of them do not return after such crisis,” says Heiko Schwarz.
“I think a lot of systems struggle, and a lot of times risk is not considered, not because people don’t want to consider it. It’s just so hard for them to access this information at the right time. That’s why it’s so important to have this information right here in the system,” observes Rösch, who has worked on the development and installation of several Fortune Global 500 supply chain digital transformations, utilizing JAGGAER’s world class Source to Pay solutions suite.
How does the CPO manage juggling risk with creating value, when Deloitte’s 2018 CPO Survey found that priority #1 is savings, priority #2 is innovation, and priority #3 is risk management? The stakes are even higher approaching 2019, as the impact of the trade and tariff wars is finally being felt at the last stop: cost to the consumer.
Schwarz and Rösch will explore how proper application of the right technologies can insulate companies from some level of risk, allowing CPO’s to continue to focus on value creation. They will explore the concepts of building digital twins of supplier networks, initiating big data monitoring, machine learning, and applications of available Artificial Intelligence. This conversation will be illustrated with real world examples of global food and automotive manufacturers and the effect of supply chain disruptions on their revenue and brand equity. Schwarz and Rösch provide important forward-looking insights for any CPO struggling to balance risk against value.