Strategic Risk Management in Supplier Relationships PPT

This PPT slide, part of the 80-slide Value Managed Relationships Analysis PowerPoint presentation, titled "Value Managed Relationships" outlines critical considerations for clients aiming to transition towards a new procurement strategy. It emphasizes the need to identify and mitigate potential risks associated with supplier relationships.

The left section, labeled "Potential Issues," highlights several key concerns. Over-reliance on a limited number of suppliers can lead to vulnerabilities, as these suppliers might exploit the situation, increasing the risk of operational failures. The slide also notes the challenges posed by future changes in package offerings after a partner has been selected, which could disrupt established agreements. Additionally, shifts in industry structure post-partnership selection could further complicate the relationship dynamics. Lastly, the slide points out that the optimal supplier may be one with whom the client has minimal prior experience, adding another layer of risk.

On the right side, titled "Potential Approaches to Address Risk," the slide suggests strategies to navigate these issues. It recommends diversifying supplier relationships by focusing on those with overlapping capabilities and spreading volumes across multiple plants. Establishing a secondary pool of suppliers can provide backup options for primary partners. Including performance clauses in contracts can help ensure accountability. The slide also advises selecting partners who are leaders in innovation and design, and structuring contracts to allow for flexibility in response to changing circumstances. Utilizing purchasing power to influence industry dynamics is another suggested approach, which could aid in identifying a preferred supplier. Lastly, initiating pilot relationships can help clients assess supplier performance quickly, minimizing long-term risk.

This slide serves as a strategic guide for organizations looking to optimize their supplier relationships while navigating inherent risks.

This slide is part of the Value Managed Relationships Analysis PowerPoint presentation.

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