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Ensuring SupplyChain Agility. Analysis by McKinsey found that companies can now expect losses equal to almost 45 percent of one year’s profits over the course of a decade due to supplychain disruptions. For example, supplychains may have to be adjusted to support new company sustainability or other CSR policies.
Capturing Value occurs when a contract has been established that governs the responsibilities and obligations of both supplier and buyer, and well as when the organization has the right Procure-to-Pay processes in place to ensure compliance to those agreements, goods, services and prices. .
How can government do better in this current world of supplychain issues and labour shortages? Solicitation Processes Once a government buyer has issued a solicitation, they must balance meeting the government’s needs with maintaining the interest of quality vendors. Addresses current supplychain and labour issues.
Needs analysis ensures an accurate understanding of the goods / services being procured. Much has been written about mandatories, but they are to be evaluated on a pass (yes) or fail (no) basis and must relate to the bidders’ ability to provide the requested goods / services.
The main categories of risk are covered in Figure 1 to include supplychain, information security, location, CSR or ESG, financials, regulations, quality and reputation. Clearly, some of these are more aligned to a product-oriented business versus a services one. Figure 1: Categories of Third – Party Risk.
It starts with identifying the right suppliers for a need, sharing requirements and evaluating supplier offers, selecting the most appropriate supplier, negotiating terms and contracting with them to receive goods and/or services. Source-to-Pay is typically broken into two parts – upstream and downstream.
The paper will be published in Legal Studies in due course.(*) Public procurement is concerned with the award of contracts for the supply, for pecuniary interest, of goods, services or works to the public sector.
Approximately a third of public sector spending goes to procure third-party goods, services, and works. Public buyers seeking to procure goods, services or works from the market need to process large amounts of information to choose a responsible provider offering the best possible terms on quality, cost, experience, etc.
Alternatively, maybe the contractor can speed up delivery, assume risk of loss, make a quality improvement or otherwise perform a value-add, take on additional tasks, provide a better warranty, confer more intellectual property rights, provide free storage, give more transition support in off-ramping the contract, etc.
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