SIG University Certified Third-Party Risk Management Professional (C3PRMP) program graduate Shani Richards shares how this course has opened her eyes to the inherent risks associated with not having a solidified third-party risk management system in place.
SIG University Certified Sourcing Professional (CSP) program graduate Kaila Flynn shares how this course has challenged her thinking and understanding of sourcing in order to develop a better understanding of the sourcing and procurement world.
Kaila Flynn, Sales Executive, Sourcing Industry Group
SIG University Certified Sourcing Professional (CSP) program graduate Jon Cody Hildebrand discusses the principles and key ways of managing different stakeholders.
There needs to be more debate among sourcing professionals in large organizations regarding the importance of achieving real buy-in from stakeholders. The challenges are many in supply chain management, but no challenge is more nuanced than stakeholder management. A project manager should consider these guiding principles to ensure program success.
Identify your stakeholders. The big idea of this principle is to figure out who your stakeholders are and how they relate to the sourcing initiative. A stakeholder is "any group or individual who can affect or is affected by the achievement of the organization's objective" (Edward Freeman, A Stakeholder Approach to Strategic Management). However, the idea seems obvious. More than crucial players could be needed to avoid complications.
The number of stakeholders and their level of involvement will vary depending on the program's scope. The sourcing professional should scan to identify everyone that should be involved; large-scale enterprise-wide programs will require a comprehensive look for players at all levels of the organization. A vertical scan will identify every stakeholder from the top down, from C-suite employees down to the end users.
Jon Cody Hildebrand, Procurement Specialist, Coca-Cola Consolidated
In the recent May CPO & Executive Virtual Series hosted by SIG, we had the pleasure of welcoming esteemed speakers: Michael Koontz, Vice President of Strategic Sourcing & Business Leader at ATD Sourcing Solutions; Ruy Martins, Plant and Supply Chain Director at Urgo Medical; and Oren Salzman, Chief Procurement Officer at MetTel. The event was filled with engaging discussions and thought-provoking takeaways. Let's dive into the highlights!
Evolving Sourcing Strategies
Kicking off the day, Michael Koontz started the day with his insightful keynote presentation. He emphasized the need to think beyond contracts and understand the bigger picture of the business. Being at the decision-making table requires aligning with the company's vision and continuously educating ourselves. Plus, he shared some cool insights on using AI tools to make our sourcing processes more streamlined and efficient.
Transforming Traditional Purchasing
Next up, Ruy Martins took us on a journey of transforming traditional purchasing into strategic sourcing. He stressed the importance of taking a proactive approach, where strategy drives the company rather than being solely controlled by supply and demand. It was all about embracing Integrated Business Planning (IBP) and empowering the business to adapt and thrive. We were definitely inspired to think differently!
Unlocking Value and Streamlining Operations
Our last speaker, Oren Salzman, gave us a sneak peek into the world of MetTel. He shared invaluable insights on delivering value and going the extra mile. Oren emphasized the significance of creating a diverse environment that allows businesses to operate smoothly and optimize opportunities. We also dove into streamlining negotiation timelines, uncovering ways to make our processes more efficient. Who doesn't love a bit of optimization?
SIG University Certified Sourcing Professional (CSP) program graduate Noah Wilson discusses how crowdsourcing could be the innovation that businesses need to succeed in a rapidly changing environnment.
Large fast growing multinational companies involving multiple mergers & acquisitions will often have many disparate processes in place to manage Third-Party Risk. There may be programs developed by individual group companies or parts of the group to meet general procurement needs. Corporate functions such as Privacy, Information Security, Corporate Social Responsibility, or Anti-Corruption may have developed customized programs to meet regulatory requirements or address audit findings. Other programs may have been driven by the need to respond to vulnerabilities arising from macroeconomic events: systemic risks in the financial market; or the impact of Covid on the viability of cross-border supply lines. The multiple languages and cultures add a layer of complexity.
A root and branch review may enable the business to simplify processes, strip out unnecessary costs and duplication and ensure that the key risks are appropriately overseen proportionately. The approach must be focused on the return on investment to make it easier to justify and obtain necessary resourcing.
But where to start?
It is tempting to jump in and start solving the problem before it is well understood. But do not rush.
First - Remember to Reinvent the Wheel.
Nathan Coffey, Senior Vice President of Privacy & Compliance, Teleperformance
SIG University Certified Third-Party Risk Management Professional (C3PRMP) program graduate Lokesh Bhatnagar provides descriptions to determine which 4th parties are material, and how to incorporate them into the post-contract phase in the lifecycle as well as effective risk monitoring and oversight.
In the increasingly interconnected global economy, organizations depend on third-party vendors and service providers to maintain efficient, competitive supply chains. Effective third-party risk management (TPRM) is vital to safeguard organizations against financial, operational, and reputational damage. However, many TPRM strategies often overlook the risks posed by fourth-party subcontractors, particularly those that are material to the organization.
Understanding Materiality in Fourth-Party Risk
Before delving into the management of fourth-party risk, it is essential to grasp the concept of materiality. A material subcontractor is one whose failure or poor performance could significantly impact an organization's operations, reputation, or regulatory compliance. Factors contributing to a subcontractor's materiality include:
Sensitive data handling: Assess the risk associated with subcontractors managing confidential information, as they pose a higher risk of data breaches or misuse.
Impact on third-party service delivery: Evaluate how a subcontractor's performance could impair a third party's ability to deliver contracted products or services, possibly leading to operational disruptions.
Lokesh Bhatnagar, Senior Service Delivery Leader, American Express