Risk management as part of the purchasing strategy

We live in turbulent times. Uncertainties, crises and wars are on the rise and jeopardize the functionality of supply chains. But even in a changing world, risks must remain manageable. Many companies are looking for alternative sources of supply, raw materials or specifications. All of this contributes to risk diversification. But they are complex. With two simple Connected Worker tools, the complex approval and qualification processes can be simplified and carried out in a standardized, process- and audit-proof manner.

Events such as the corona crisis or the situation in Ukraine have serious consequences for the ability to supply raw materials that are essential for production. In order to maintain security of supply and thus production capability, it is important to diversify risks – for example in the form of alternative sources of supply (“second source”) or substitute raw materials. However, the evaluation processes are complex and cost time and money, and it is precisely this effort that can be minimized with the help of digital checklists. They support simple, standardized and (revision-)secure approval and qualification processes for a variety of qualifications.

One digital checklist per qualification

Structuring and controlling the individual qualifications via a project management system has proven to be simple and practicable in use cases. The qualifications themselves are created and managed as digital checklists within the system and can be assigned to different areas for processing thanks to the support of multi-level workflows. This can also include the classification of all materials relevant to production as part of risk management – categorization according to risk groups (technological risks, legal risks and supply chain risks) and risk level (low, medium, high) – as well as automatic calculation based on certain factors. This allows targeted processing according to priority. In this way, comprehensive planning and fulfillment control of all commodity-related activities is possible via a central dashboard.

Eliminate potential risks in advance

In practice, it looks like this: Purchasing initiates the approval and qualification process. Associated tasks and activities are defined in a checklist and assigned to the relevant responsibilities. The checklists can be structured thematically and organized hierarchically in work steps. The list is only finalized and an alternative supplier approved as a “second source” after a comprehensive check has been carried out across all process steps.

Thanks to the digital checklist, all individual steps are now available digitally and can be transferred to other IT systems such as ERP/SAP. In ERP, for example, the new specification is stored in the purchase order text or it is checked that orders can only be placed with the new supplier. Complicated Excel lists are a thing of the past. Thanks to risk management, it is possible to minimize or eliminate many potential risks in advance.

Your added value

  • End-to-end digitalization of all raw material and supplier qualifications as part of structured project management
  • Platform capability, integration into a wide range of systems, such as asset management, project management, ticket, reporting, shift book systems, etc.
  • Mapping of dependencies and links: A checklist comprises a complete qualification, it is cross-process
  • Cross-company and cross-national risk management is supported, multilingualism of checklists

Get in touch!

Would you like to know more about our solutions? Then please write me using the contact form. I will get back to you as soon as possible.

Christoph Schiffer
Sales Team Germanedge

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