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As the spread of COVID-19 takes the world by surprise, it is vital that businesses appropriately respond to multiple fronts simultaneously; employee safety, critical component shortage, cashflow restrictions and operational viability to name but a few.

It is of paramount importance that organizations and specifically supply chain & procurement functions exhibit flexibility and agility in order to adapt to constantly fluctuating circumstances. The COVID–19 Supplier Management response from KPMG recommends a 5-step approach to deal with Suppliers’ risk. As an overview, it aims to help comprehend COVID-19 exposure, by evaluating and prioritizing the suppliers’ base risk. More importantly, this approach enables organizations to position their supply chain/procurement functions as more resilient in the face of short-term threats and disruption.

  • The starting point is the formation of central team to facilitate the flow of information between key stakeholders/enablers. 
  • An assessment must then follow to produce a set of prioritized supply vulnerabilities along with the Suppliers’ pool that reside in the exposed sourcing areas;
  • Lastly, Suppliers are classified, and the strategic implications of their risk positioning are presented as a short term plan to mitigate Suppliers’ risk.

This document presents a high-level view on “how to deal with Suppliers’ risk” an issue of high concern for Supply Chain and Procurement professionals due to the Coronavirus pandemic.

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