Deloitte has just released its 2013 study of Chief Procurement Officers (CPOs) which reveals CPO challenges, fears, and how risk management activities vary across a variety of industries.
The Deloitte Global CPO Survey 2013 reported on the responses of over 180 CPOs and procurement directors from seventeen different countries throughout the Americas, Europe, Asia, the Middle East, Africa and Australia, and found that 41% of CPOs are involved in risk management activities. However, CPOs’ fears varied considerably depending on the nature of their business.
70% of respondents in the financial services industry reported that their two supply risks were related to “regulations and reputations”, while 61% of those in the manufacturing industry admitted that commodity price volatility kept them awake at night.
Reputation risk was also the biggest concern of respondents from the healthcare and life sciences sector, while the energy industry also considered reputation to be their biggest threat. Consumer businesses collectively reported that reputation and commodity price volatility were the focus of their risk management strategies.
Technology, media, and telecommunications were grouped together in the study, as these three industries all responded that service delivery was their biggest risk, while economic risk was the most cited supply risk factor from those companies in the public sector that responded to Deloitte’s request for information.
In the conclusion to the study, Deloitte determined that risk management is still an immature procurement function for many companies who, in Deloitte’s words, are “still coming to terms with this increased accountability.” The conclusion continues that, if procurement executives are to meet the expectations of their businesses, CPOs will require more sophisticated tools and approaches to evaluate and monitor future supply market risk.
The study also forecast that in order to bridge the “capability gap scenario,” planning through the use of predictive analytics and real-time reporting of supply chain risk through interactive dashboards is likely to increase in prevalence in the near future.