Integrated Risk Management

A Playbook for Procurement

The Hackett Group

Risk is moving up on the agenda of corporate leadership due to its impact on the bottom line, market valuation and shareholder value. As modern supply chains grow more complex, the historical predominance of reactive risk management is no longer sustainable.

The Hackett Group expects broad adoption of formalized supply risk management programs by world-class procurement and supply chain organizations in coming years. While global risks have grabbed most of the headlines, even greater risks may lie much closer to home. In fact, many companies face hazards to their supply chain caused by their own focus on cost reduction in recent years. For instance, while conventional practices like outsourcing, use of mega-suppliers, and Lean and just-in-time inventory management have clear business justifications, collectively they have increased risk by obscuring numerous vulnerabilities.