Shifting Supply Chain Priorities Reinforce TPRM Business Value

August 19th, 2020 Cindy Rucker Reading Time: 4 minutes

A reliable supply chain is especially important in uncertain economic times when customer retention is critical. Disruptions don’t just impact revenue today; they impact customer lifetime value, a measure used by companies ranging from consumer packaged goods to banks. Whether it’s toothpaste or a home equity loan, when buyers can’t get your product, they find alternatives and often don’t return. And the stakes are even higher for essential organizations like financial services and pharmaceutical firms that also face regulatory scrutiny.

Surveys prior to the COVID-19 pandemic show that emerging risk has been on the minds of boards, but it took this black swan event to expose just how hyper-efficient supply chain methodologies and supplier rationalization threaten supply chain resilience. Within weeks of the pandemic spreading globally, Axios reported that 75% of organizations experienced supply chain impact, which quickly brought supply chain resilience to the forefront of many business leaders’ minds and agendas. For instance, by April, PwC research found that more than half of CFOs considered vendor viability a top three priority.

Third-party risk professionals are uniquely positioned to help business leaders prevent supply chain disruption. As a point of collaboration, TPRM works with procurement, business leaders, IT, legal, and vendors from onboarding through offboarding and delivers key metrics that top management and the board rely on to make good decisions. So, when a crisis occurs, third-party risk is also the inflection point for identifying and mitigating potential risks to supply chain resilience.

How TPRM Supports Supply Chain Resilience

As the central point for data related to third parties, the TPRM team has a unique opportunity to create a 360-degree view of third parties that delivers broad insights about their viability and resilience. With the right tools, they can identify:

Supply Chain Resilience Risk Calls for a Different Approach

While the increased focus on supply chain resilience has prompted a lot more conversations about the role of TPRM in managing supply chain risk, most standard TPRM solutions aren’t suited for assessing the emerging risks that could impact the resilience of your supply chain. Some approaches that are NOT sufficient for mitigating supply chain resilience risk include:

As the business seeks to navigate this new landscape, TPRM has an important leadership role in assessing supplier resilience. With a proactive approach and the right tools, TPRM can demonstrate a direct line to revenue by protecting continuity of supply.

To find out more about how Aravo is helping organizations build better supply chain resilience, download our datasheet or arrange a demo today.

Share with Your Friends:

Subscribe to Blog Updates

Our Expertise
Who We Help

Ready to get started?

Get in touch for a better approach to third-party risk management