5 Things the CPO Should Know

A sole-source supplier is a supplier that is your only source for a specific product, and you should be aware of them when you have them. The implications of a sole-source supplier should be clear to anyone, not just a procurement or logistics professional: If something impacts the ability of this supplier to deliver goods or services, your company is going to be severely affected. How many do you have, and who are they? If you’re a CPO, you should know. If you have a CPO reporting to you: You should know.

(Bonus points for your CPO if he or she can answer this supply chain visibility question: How many of our suppliers have sole-source suppliers?)

#2: Which of our suppliers is the most critical for our network?

A critical supplier is one whose downfall can seriously disrupt your ability to meet your commitments to your customers. Sole-source suppliers are great examples of critical suppliers, but they’re not the only example. All kinds of criteria should go into this consideration: spend amount, what they supply, how often they supply it, how reliant you are on it, etc. Without question, your CPO should be able to pull a list of these suppliers and know exactly why they’re critical to your supply chain—and your business.

In case you haven’t noticed, these questions are getting harder as we go.

It may be that your CPO is totally on top of your actual suppliers—but, unfortunately, this doesn’t mean you have the full picture of the risk in your supply chain. What if a geographic region is susceptible to a particular risk event, like a looming hurricane or civil unrest? If you wait to hear about these situations directly from your suppliers, it's going to be too late to do anything about them. But if you’re monitoring your key geographic regions for events that will disrupt your supply chain—and therefore your business—then you’ll be able to take action to prevent or minimize the damage from these events.

#5: How close are our relationships with our key suppliers?

Okay, this last one is a trick question. Because I can already tell you the answer: Not close enough. Everybody talks about supply chain visibility these days (that is, an understanding of what’s going on in all tiers of your supply chain), but nobody really knows how to do it. However, there is an answer, and it's one word: collaboration.

Supply chain visibility is all about communication, and I guarantee that your procurement organization isn’t doing enough of it. Having a tool for reaching out to suppliers when things are going wrong—or when you think they might go wrong—is an absolute must for the resilience of a company.