For global organisations, supply chains are crucial routes to engaging the resources needed to support business growth. Having access to a variety of expertise able to operate in a flexible manner is hugely beneficial for organisations seeking the most cost-efficient way to run a business in a post-pandemic environment. However, managing multiple suppliers across varying locations certainly presents procurement teams with an element of risk.
The challenge is that across your own supply chain you’re likely utilising multiple vendors, who in turn will have their own suppliers and distribution centres and so the chain becomes more of an intricate web of siloed resources interconnected in different ways.
The benefit of this approach from a talent resourcing perspective, though, is simple – by using supply chains, firms can access the skills they need at the time they need them. But the associated risks of engaging and deploying workers from multiple sources and geographies, all working in different ways and through varying employment models, are vast and complex to say the least.
So, what are the best practises concerning supply chain risk?
Identify and quantify the risks
In the first instance, a full risk assessment to identify areas of concern and quantify the potential impact on the business will provide solid foundations for a risk management program. Bear in mind that potential risks vary significantly – from information security gaps and cyber threats to employment compliance and worker security risk concerns.
That’s why supply chain risk management (SCRM) isn’t something that can or indeed should be handled by one siloed department. It requires involvement from beyond procurement – including external experts and contacts from across the supply chain – to identify any risks and agree how to best control these.
Think global and local
For a global business, there are local factors concerning supply chain risk management as well. This has become particularly pertinent during the pandemic where regional lockdowns have impacted supply chains. As such, it’s important to plan for country-specific risks that could impact your vendors and the resources they supply. This includes any local legislative changes that could have an impact on your firm’s compliance.
Make the technology work for you
Building on the above point, technology is increasingly proving valuable in SCRM. A vendor management system (VMS), for example, is a software system that facilitates the procurement of contingent workers and it will often have supplier management and risk mitigation built into it. It will store the data you need to monitor and assess vendor performance – including finance tracking, payroll and invoicing data and critical candidate information.
Gain complete transparency
Where suppliers are being used to source talent – whether they are operating through a statement of Work (SOW) or an agency contract – having complete transparency over budgets and roles is key.
Knowing exactly where the responsibility lies to control costs and monitor compliance can mitigate some of the risks across the supply chain. This does, again, bring the debate around collaboration between procurement and HR teams back to the fore.
However, ensuring those involved in supply chain management are working together and have the required tools to reduce any associated risks is key. Having a centralised hub of data, for example, increases the control of the business and ensures your firm doesn’t face over or under supply of critical resources.
Monitor your SCRM
We’ve seen this year just how quickly circumstances can change and that has certainly acted as a catalyst for many things, including a review of supply chain risk management processes. We simply can’t avoid change (in fact we’d argue that it is often beneficial for workforces). However, it does mean that any supply chain risk management assessments and procedures need to be closely monitored and updated accordingly.
Your vendors and the talent they supply will be facing constantly evolving circumstances that could impact your business. Any new technology that’s being introduced to manage contingent workers and any updated IT ecosystems, for example, can add a new cyber security or data information breach risk that you need to be aware of.
Best practises concerning supply chain risk: the benefits of an MSP
The above can understandably seem like a daunting, but vital, challenge for procurement teams. But it doesn’t have to be something that is solely owned in-house. A Managed Service Provider (MSP) not only has the supplier relationships, but also the experience to grow and shrink service requirements as you need them to, all while managing the risks for your business.
At Guidant Global, for example, we’re well-versed in assuming control of existing supply chains and PSLs, giving them the opportunity to supply within a Guidant MSP programme. We then install governance that allows us to review performance so we can refine the supply chain to include only the very best suppliers. By building an engaged recruitment supply chain which is passionate about finding the right candidates with the right skills, we can reduce the cost of recruitment and the time to hire, while also providing timely market insight and driving innovation.
A Managed Service Provider manages the temporary worker recruitment for an organisation and is responsible for the end-to-end management of the contingent workforce – from supplier management to strategic workforce planning. While there is no ‘silver bullet’ concerning supply chain risk management, utilising an MSP is one of the most effective, cost-efficient ways for a business to manage its contingent workforce and control supply chain risks.