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Procurement risk advisory

Procurement, contract and supply chain management risk advisory

The global nature of most supply chains requires scrutiny of internal procurement and contract management functions to ensure they are robust enough to minimise risk.

With the PKF Integrity team we are here to ensure you have an effective procurement and contract management strategy to save you and your business from financial and social risk.

Some of the procurement, contract and supply chain risks that can have significant financial and reputational risk, include but are not limited to:

  • Fraud, corruption and cost leakage
  • Modern Slavery
  • Cybersecurity
  • Poor physical security and business continuity planning
  • Poorly worded contracts; and

Adopting a pragmatic, risk-based approach that considers the operational context must be adopted to mitigate these risks. Considerations include the current and future business, political and security environments (domestically and overseas).

An effective procurement and contract management strategy is also one that engages a range of suppliers and contractors in order to:

  1. Identify and implement cost saving opportunities; and
  2. Provide greater certainty of supply.

Procurement Strategies

get this right and the rest will follow

The integrity and maturity of an organisation’s procurement function has a direct impact on the other activities that flow from it, being contract and supply chain management.

Procurement of goods and services is the search for and acquisition of a partner who can meet an organisation’s needs in terms of value and quality. But at the same time, not at the cost of damage to reputation, if it turns out that a business partner has integrity skeletons in the closet or cannot meet contractual obligations.

Fundamental to minimising future pain is to know who you’re dealing with by conducting thorough business partner due diligence, ongoing monitoring of relationships and awareness of risks and their red flags.

Pre-contract execution due diligence

It is much easier not to proceed with a business relationship rather than seek to end it after entering into a contractual arrangement. To ascertain not only financial viability, but whether there are any integrity risks such as a history of involvement in fraud and corruption, modern slavery activities or a history of failing to fulfil contractual obligations, thorough due diligence should be undertaken prior to contract execution.

Ongoing monitoring of contractual performance

Once a contract is in place, ongoing monitoring and management of performance is required to ensure goods and/or services being delivered on time, in accordance with quality specifications and based on agreed rates and fees.

Awareness of risk indicators or ‘red flags’

Awareness of indicators of risks such as fraud and corruption, modern slavery and contract under or non-performance is key to identifying issues early so that they can be promptly and effectively dealt with.
Talk to our Integrity team today to take control over your procurement obligations