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Q&A with Oracle’s Mark Peachey: Strategic Enablement Reduces Costs and Risks
“Enablement,” the part of the procurement process for finding, vetting, and connecting with new suppliers, is taking on greater importance today as companies grapple with new economic challenges. At the same time, enablement can play an essential role in risk management and furthering corporate-responsibility policies, including environmental initiatives, argues Mark Peachey, director of Oracle’s procurement product strategy team.
Q: How can enablement help companies compete in today’s tough business climate?
A: There are essentially three areas. The first involves reducing the risks companies face when taking on a new supplier. Enablement combines things like credit checks and plant inspections, including QA labs, to determine if you’re comfortable that a potential supplier will be around today and tomorrow, and whether it can meet quality requirements.
Second, enablement helps identify new opportunities as you go through the due diligence process. The classic situation is that one of your manufacturing plants engages in an enablement process with Supplier X, and later another one of your manufacturing plants goes through the same process because it didn’t know the reviews had already been done. Companies need to make that information available to all parts of their business so everyone can leverage the intelligence for their own purposes.
A third benefit comes from reducing costs. Once you’ve established a relationship with a supplier, you need to keep its key-contact and financial information up to date. Some companies maintain a team of people to do that, but the right enablement tools can help you bring down those expenses.
Q: Looking specifically at risk, how can enablement help companies avoid running into regulatory or ethical problems?
A: Companies want to know that if a problem is identified in a particular facility within a given country they’re able to identify all of the channels through which products come to that facility. Then, as soon as the problem is uncovered, it can take the appropriate actions. Part of the enablement process is to gather the information that would allow them to ensure that it’s familiar with its own wholesalers, for example, but to also understand the complete supply chain behind those wholesalers.
Q: Are there larger implications for having this level of supply-chain visibility?
A: There’s an interesting environmental angle to all of this. Enablement processes will help companies gather information for intelligent assessments of whether a supplier is engaging in the right green policies that will help the buying organization achieve its environmental standards. Many organizations now have policies in place for corporate social responsibility that are including strong environmental elements. This not only means they themselves are meeting those challenges, but that their suppliers are able to do the same.
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