Risk management in procurement is the systematic process of identifying, assessing, and mitigating potential threats to an organization's purchases or supply network. Procurement is responsible for developing strategies to minimize the presence and impact of things like disruptions, financial losses, cyber risks, or reputational damage associated with procurement or supply chain.
Risk management is a core component of the procurement function, and, through a combination of expertise and digital tools, they regularly have to conduct supplier risk assessments, risk analysis, compliance checks, and market volatility monitoring.
Safeguarding an organization from risk is a top priority for procurement, and implementing an effective risk management program not only protects the business it can also help to improve supplier performance and supply chain resilience, lead to better decision making, fortify the business in complex and uncertain global markets, and in general contribute to business continuity and growth.
