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The Role of a GPO in Supply Chain Risk Management

The Role of a GPO in Supply Chain Risk Management

Every supply chain has risks, but a trusted Group Purchasing Organization (GPO) can ensure a company manages them efficiently. With many moving parts within each supply chain that are often mutually dependent, any vulnerabilities or disruptions can cause the whole system to fail if unforeseen circumstances strike, such as pandemics, natural disasters, travel restrictions, production delays, or supplier complications disputes. These can lead to costly inefficiencies, service disruptions and negative customer sentiment if not managed properly.

Fortunately, CoreTrust – a leading commercial sourcing agency delivering contract savings to private equity portfolio companies and large corporations via an aligned membership and unparalleled scale – provides the tools and support to help companies proactively identify and address these risks. As a CoreTrust member, companies gain the confidence they need to protect their operations from unexpected disruptions while achieving their desired financial performance goals.

What are Common Supply Chain Risks?

A variety of supply chain risks can have complex and costly consequences for any business. According to Gartner research, 89% of companies have experienced a supplier risk event in the past five years, heightening the urgency to proactively prepare for these risks before they become problematic:

  • Cybersecurity threats – With the increasing sophistication of cyber hacking and the rise of advanced technology in industries across the board, cyber attacks on supply chains have become more frequent and varied in recent years – from malware distribution or exploitation of software flaws to data breaches and many other types of attacks. With the potential to disrupt not just one, but many downstream customers, one attack can wreak unfathomable havoc on a supply chain and cripple business operations.
  • Uncertainty and market volatility – Supply chains encounter volatility due to changes in demand, market regulations, the environment and even changes within the company itself. Understanding both demand levels and supply constraints based on dynamic market environments ensures that you have the right amount of inventory at the right time. Because supply chains are highly interconnected; issues occurring in one place can quickly ripple across the entire system. The rise of globalization has also increased supply chain complexity and risk levels.
  • Inability to meet demand – As market conditions change over time, forecasting demand accuracy is essential to ensure that the right quantities of goods are delivered on time.
  • Compliance risk – With a large number of stakeholders involved in any supply chain operation often spread out globally, it can be difficult to meet all relevant regulations. These compliance risks can be exacerbated by data privacy issues, foreign trade restrictions, anti-bribery laws or labor regulations.

As a CoreTrust Member, you gain access to our network of trusted suppliers who are taking proactive steps to mitigate these risks. Not only do members benefit from reduced costs, but they can also count on the peace of mind that comes with less overall volatility. Not all risks can be avoided, but CoreTrust Members can be assured that they have the best support system in place to prevent major disruptions to your business operations.

How Can CoreTrust Help Offset Supply Chain Risks?

GPOs like CoreTrust help companies offset and overcome risk by giving them access to a network of pre-vetted and reliable suppliers providing products and services across multiple indirect spend categories. By leveraging the collective buying power of numerous companies, CoreTrust can negotiate and secure better pricing, terms and services from their suppliers that benefit all members.

The market expertise that CoreTrust brings in areas such as supply chain planning and optimization provides our Members with even more value. By arming procurement teams with strategies such as diversification, continuous supplier engagement and cost analysis, companies can gain valuable insight into potential risks and understand how best to respond when they arise.

Additional Benefits of Partnering with CoreTrust

Beyond acting as a supply chain risk management resource, CoreTrust leverages the collective buying power of its members and improves the efficiency of their supply chain operations.

Other membership benefits include:

  • Lower prices – Through collective purchasing, companies within CoreTrust can get lower prices on product procurement, leading to substantial savings. This potentially eliminates one of the primary risks associated with supply chain management: rising costs and market price variations.
  • Quality assurance – CoreTrust has established quality standards for all vendors, ensuring that all Members consistently receive high-quality products from top-tier Suppliers. This helps reduce supply chain risk caused by unreliable vendors and materials, and it helps maintain a steady flow of goods in a company’s network without sacrificing quality.

With CoreTrust’s help, companies across all industries benefit from better supply chain visibility, greater risk management capabilities and improved bottom-line costs by negotiating better prices with their suppliers.

In today’s highly competitive, global business environment, companies must ensure airtight supply chain management to remain competitive and profitable. There are numerous potential risks that can disrupt supply chain operations and should be proactively managed. CoreTrust offers specialized services and support that enables companies to achieve more efficient, stable and cost-effective supply chain operations.

Want to learn more about how CoreTrust can help you to mitigate the risks of your supply chain? Interested in the overall value CoreTrust offers to its members? Just curious if our contracts can meet your company’s needs? We would love to tell you more about what it’s like to have CoreTrust as a valued extension of your procurement team. Click here to tell us more about you and your business, and a member of our team will reach out to discuss how we can deliver contract value through our aligned membership model and unparalleled scale.