Oracle Value Chain and Procurement Transformation Edition
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Supplier Risk Management Gains in Importance

In the wake of the recent global financial crisis, ongoing natural disasters in key sourcing regions, and high-profile product recalls, companies are intensifying their approach to supplier management and placing greater emphasis on mitigating risk.

At the heart of these efforts is a better understanding of what constitutes supplier risk, the threats it poses to top line revenues and the need for readiness plans to address adverse events. This creates ripple effects throughout the value chain as organizations redefine what constitutes the best balance of cost, quality, risk, and innovation.

“Supply-market risk and reward can make or break a company and needs greater attention, especially in an increasingly volatile global economy,” says Pierre Mitchell, senior research director for The Hackett Group, in the new May, 2012 report, World-Class Supply Analytics and Information Management, Part 2: Supply Information Management.

A Portfolio of Solutions
Risks—both known and unknown—are as diverse as companies themselves. This means there are no one-size-fits-all solutions for enhanced risk management. So leading organizations are arming themselves with portfolios of solutions, including

Strategic network optimization. These technologies, such as Oracle Strategic Network Optimization, help organizations model and configure value chains, including factors such as the best locations of factories and suppliers, and the inherent risks of natural disasters and other potential supply disruptions.

Strategic sourcing. Solutions such as Oracle Sourcing help organizations understand and make more timely decisions during contract awards by weighing tradeoffs about pricing reductions, transit costs, and risk.

Analytics and scorecards. For insights into internal and external events shaping supplier risk, organizations need traditional business intelligence solutions such as Oracle Business Intelligence Enterprise Edition 11g, and tools for gleaning insights from semistructured and unstructured data, such as Oracle Endeca Information Discovery.

Supplier master data management. Data management is central to fostering visibility into risk conditions across the value chain and enterprise applications. With Oracle Supplier Hub, organizations can consolidate information into a central “golden supplier record” that feeds any other applications that consume or process supplier data.

Supplier lifecycle management. These solutions help administer the process of overseeing a supplier through its lifecycle—from prospective supplier to incumbent, and ultimately during off-boarding. Oracle Supplier Lifecycle Management helps organizations develop more competitive suppliers by transforming qualification, administration, and assessment.

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