Let the software do it
A viable solution is to invest in risk assessment software, which can pay a handsome ROI instead of relying on manual assessments, said Schwarz.
According to Riskmethods, for example, manually monitoring five sub-suppliers and 100 tier 1 suppliers requires 300 working hours per year. The time involved is typical for a company when buyers or logistics experts assess suppliers themselves. They typically command $50 per hour in wages, so the cost of this task usually totals $15,000 annually. However, software-based supply chain identification software can shave 58% from those costs, generating $8,700 in annually savings. Additionally, the time saved by using software means that buyers have more time to devote to procurement and logistics management.
All of these reasons add up to why it makes sense to rely on software solutions for supplier monitoring and management as well as procurement, says Schwarz.
“With fully automated software, companies can devote more time to more valuable tasks, instead spending money on human resources that software can handle instead more efficiently and for less money,” says Schwarz.