Supply chain continuity: the majority of companies have limited or no visibility beyond tier one of their supply chain
- Published: Wednesday, 28 February 2018 08:09
As many as 65 percent of procurement leaders have limited or no visibility beyond their tier one suppliers, according to the Deloitte annual Global Chief Procurement Officer (CPO) survey. While visibility of the supply chain is crucial for businesses to ensure factors such as meeting regulatory requirement, risk planning, and supply chain continuity, currently just six percent of procurement leaders say they have full transparency of their entire supply chain.
Brian Umbenhauer, principal and global head of sourcing and procurement at Deloitte, explains: “It’s both a worrying and opportunistic finding that two in three procurement leaders have limited visibility beyond their tier one suppliers. This has major implications for organizations across all industries, particularly for meeting regulatory and corporate social responsibility requirements and for the identification and mitigation of supply chain risks. Improved transparency of pricing, supplier locations and critical dependencies can help procurement leaders deliver greater value and avoid potentially significant regulatory, reputational and operational risk.”
Managing risks is a priority for 54 percent of procurement leaders and CPOs are most likely to cite the uncertainty and outcomes of trade negotiations, such as Brexit and NAFTA, as a significant risk factor (33 percent). Overall, global macroeconomic risk ratings from procurement leaders have weakened over the past year.
Overall, cost reduction (78 percent), new product/market development (58 percent) and managing risk (54 percent) remain the top business strategies for procurement leaders in 2018.
Conducted in association with Odgers Berndtson, the global CPO survey is an annual survey of chief procurement officer’s across the world. 504 procurement leaders from 39 countries around the world took part in this year’s survey, representing organisations with a combined annual turnover of $US5.5 trillion.