Exploring Risk and Resilience at PSC LIVE: The US Summit

Global supply chains have faced constant disruptions since 2020. From the COVID-19 pandemic to Middle East instability and US President Donald Trump's tariffs, procurement professionals have operated under constant reaction. For procurement teams tasked with ensuring supplier continuity and managing vendor relationships, the challenge has shifted from tactical sourcing to strategic risk management.

However, the need to take charge and mitigate impact has become clear – in an ever-shifting world, procurement leaders must develop long-lasting resilience to properly face risk. At Procurement and Supply Chain LIVE: The US Summit, industry leaders explored strategies for mitigating risk, with particular focus on how procurement functions could drive organisational resilience.

Amid ongoing geopolitical volatility, procurement teams have found themselves at the centre of business continuity planning. The traditional role of negotiating prices and managing contracts has evolved into a strategic function requiring visibility across multiple supplier tiers, sophisticated risk assessment capabilities and agility to pivot sourcing strategies rapidly.

Procurement faces ongoing volatility

Since 2020, ongoing volatility has struck supply chains aggressively. US tariffs, inflation, climate change and Middle East conflict have put businesses worldwide in flux. Closures of the Strait of Hormuz and subsequent reroutes have spiked costs and elongated travel times, forcing procurement teams to renegotiate contracts and identify alternative suppliers at unprecedented speed.

Consequently, procurement departments have developed flexibility and resilience to respond to changes while remaining competitive. Ongoing resilience strategies have included investments in AI and digital tools, though some leaders have prioritised transparency or sustainability in supplier selection criteria.

A Global Supplier Risk and Sustainability report by Achilles revealed major gaps in visibility across global supply chains, with further risks contributing to disruption and weakness. For over 30 years, Achilles has helped clients meet requirements by providing transparency, carbon reduction and supply chain management.

According to the report, only 6% of organisations reported full visibility into Tier-2 and Tier-3 suppliers, with nearly half reporting limited or no visibility beyond their immediate supplier base. For procurement professionals, this represents a significant blind spot in risk management. With ongoing regulatory expansion, supply chains are becoming more complex with increased exposure to external pressures. This lack of visibility creates concerns of third-party supplier risks affecting everything from product quality to regulatory compliance.

Increasing pressure to adapt requires stronger supply chain visibility, robust contingency plans and the ability to anticipate events. Procurement teams are increasingly expected to develop supplier scorecards extending beyond price and delivery metrics to include financial health, cybersecurity posture and environmental, social and governance (ESG) performance.

Leaders took to the stage in the Supply Chain Risk & Resilience panel, sponsored by RapidRatings, at Procurement & Supply Chain LIVE: The US Summit. Here, they discussed their experiences in leading transformation and risk mitigation from a procurement perspective.

Breaking down procurement silos

For too long, data has been spread across manual processes, with companies having splits throughout departments. As demand has increased, with growing pressure to do more with less cost and fewer resources, the importance of cross-company collaboration has been revealed. Procurement teams, once operating independently with their own supplier databases and assessment tools, now integrate their insights with finance, operations and risk management functions.

Previously, fragmented data within businesses led to delays or mistakes, with organisations lacking collaborative procurement and supply chain functions. Since 2020, however, procurement and supply chain leaders' roles have been understood as strong drivers of both efficiency and resilience.

Now, strategy meetings in leading companies have stronger collaboration, with insights shared from various functions. Procurement professionals bring supplier intelligence to executive decision-making, influencing everything from product development timelines to market entry strategies.

"More and more, we are seeing companies de-siloing their risk management functions and we're increasing the communication flow across risk management functions, specifically with financial health that we measure," explains James Gellert, Executive Chairman at RapidRatings.

"We've seen for a long time that people or companies would have someone or some team that did some form of financial assessments, but then someone over here did the cybersecurity risk, someone over here did ESG, but there wasn't a lot of communication and sharing of insights proactively across them.

"A company that is weakening starts to cut corners, but we're seeing across the industries that we have clients, that there is more attention to this connectivity.

"In order to get sub-tier visibility, you've got to make the tier ones understand why there's an advantage to sharing some of that information and then working together to get the insights you need to make the proper business decisions that should be helping you and helping the tier one."

Organisation and supply chain visibility is a significant starting point, but action must follow these insights. If a procurement team gains supply chain visibility and finds weak spots but does not take action, it does not mitigate the risk. The value of procurement lies not just in identifying risks but in executing mitigation strategies.

"It's not just about visibility. I think you need actionable visibility, you want visible supply chains, you want to make sure that it's flexible enough to meet with your forecast fluctuations," adds Abhijit Supekar, Senior Director, Global Supply Chain at Aeva.

"Then you want the availability when you want the part. I would actually say visibility, flexibility and availability are the three pillars of how actually you make it an actionable supply chain."

Strategic supplier relationship management

In today's environment, supply chains cannot be completely risk-free. Businesses face constant changes and unexpected events. Procurement professionals, however, can mitigate risk by exploring their supplier base and making strategic decisions to build resilience.

Procurement leaders need to examine their current supplier base, with full visibility, to see where strengths lie. Close collaboration and communication between supply chain tiers is essential to support those who need it or understand when a supplier offers more risk than reward to operations.

As organisations explore supplier diversification or bring operations closer to home with nearshoring and localisation, each potential supplier needs close examination. Procurement teams are developing more sophisticated supplier qualification processes that balance cost competitiveness with risk exposure.

"It's all about the trade offs. You can have this reliable supplier with this price, but on the other hand, if you change to maybe a more competitive price supplier, how does that impact your operations?" explains Laís Piccinini Doi, Associate Director Sales and Operations Planning (S&OP) - Meals at Kraft Heinz Company.

"Is it a risk that you're willing to take to get that extra productivity or not? In the end, it's always a collective decision on what we're trying to achieve. The suppliers nowadays also want more visibility. They want to make sure that they can count with the business for a longer period of time than just being one offs and all of those things plays in the negotiations that we are going to have.

"It's understanding what are the risks that we're really willing to take based on the potential scenarios that we are going to be choosing from to move forward with the business.

"Things are going to change and they're changing fast. We don't have control over everything. Always have a plan B, a plan C, a plan D, so you can keep up with your supply chain, but also giving continuity to the business. We can do the best we have with the information we have on hand right now. It's not going to be perfect, but it's better than nothing."

Through developing strong strategies, with collaboration both within companies and in the supply chain, procurement professionals can take small but vital steps to developing resilience amid ongoing risk. These changes come with multi-tier visibility and flexibility to adapt plans. For procurement teams, this could mean the difference between reactive firefighting and proactive risk management that protects business continuity and competitive advantage.