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The evolution of procurement means that the function’s success is no longer just about sourcing services and reducing cost.
Nowadays, procurement teams face an increasing number of complex challenges, as reported by CASME members around the world during a series of roundtables. Here are the top six issues.
1. Risk management
Risk is always a key concern for procurement, with the primary focus on suppliers’ financial status, followed by health and safety and industry practices. It’s no longer good enough to simply engage with your tier-one suppliers. Emphasis needs to be paid to controlling the approach taken with tier-two suppliers, ensuring that the necessary obligations are passed down to subcontractors.
2. Reputation and brand image
It’s not difficult to recall allegations of child labour in the overseas supply chain of certain retail brands, or issues around modern slavery both at home and abroad. The knock-on effect can be disruption to brand and public image and ultimately an impact on profitability. The Modern Slavery Act goes some way towards addressing this, but issues remain around compliance.
3. Corporate social responsibility
Can procurement ever be sustainable? Organizations are making tremendous progress in the approach to direct materials, but indirect procurement is more complex.
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