Category and supplier risk and opportunity assessment
Our team's experience working with clients to determine supply chain sustainability risk and impacts, has resulted in the analysis of vast amounts of sustainable procurement data.
We use spend data to assess levels of sustainability risks and impacts. Risk scores (likelihood x consequence) are mapped against spend to inform different category and supplier strategies for mitigating risks. Inherent risk scores are adjusted based on an organisations policies and procedures to manage various sustainability risks, as well as desktop assessment of supplier sustainability risk management to derive residual risk scores. Evaluation of an organisations capability to influence suppliers is also factored in to prioritisation.
The advantage of this kind of modelling of category and supplier risk vs spend is to:
- Inform sustainable procurement action plans
- Prioritise suppliers for risk management and engagement
- Identify material issues to be addressed through tender specifications and contract management
- Assist with the development of a category management plan.
Additionally, for one client, we partnered with the Integrated Sustainability Analysis (ISA) research group at the University of Sydney to determine sustainability impact intensity per dollar, e.g. greenhouse gases. This provided client insight on both major impact categories and suppliers, as well as highlighting categories and suppliers with disproportionate impacts compared to spend, i.e. high impact intensity for low spend. This analysis was used to inform category management plans and supplier engagement plans. In future, sustainability data will be collected directly from suppliers to benchmark back to the input/output model used for the project.