To less risk management along the supply chain

Study by Inverto: Increasing procurement risks – greatest concern is the weak Euro

To less risk management along the supply chain

Weak euro, China‘s economic development, European crises – the current economic and political crises mean risks in procurement for many companies from Germany, Austria or Switzerland. This was the result of a survey on risk prevention in purchase, conducted by Inverto consultancy.

Although the majority of purchasers consider supply and price risks, only 43 percent of the polled have an active risk management along the supply chain.

Rate fluctuations, economic crises and regional conflicts dominate the list of risks to the supply chain. As the survey shows, the experts polled by the Inverto consultancy, specialising in purchasing and supply chain management, said their biggest concern was the weakness of the Euro (59%). 38 percent are concerned about the still unresolved conflict between Russia and Ukraine, and 35 percent expect risks due to the continuing difficult situation of China’s economy.

These economic and political developments have made the security of supply while maintaining quality a relevant issue. 57 percent of the polled prioritise supply risks within all risks of procurement (2014: 29%). However, the significance rose most for price risks: Almost half of the polled (49%) said they would pay special attention to this issue – this means a rise of 42 percentage points compared with the survey from 2014. Moreover the companies focus on quality risks (43%) and the risk of the loss of suppliers (38%).

What is remarkable, is that companies with active risk management were able to prevent risks with high priority for their purchase department.

63 could reduce the loss of suppliers or ensured supply, respectively, and 56 percent could stabilise their prices. Despite these results, less than half (43%) of the polled companies has active risk management along the supply chain. Only 38 percent of these companies are measuring the success of their risk management through controlling.