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(Solution) CIPS ADNOC APGCM risks & implementation of risk management techniques in contracts

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Description

Based on your previous answers assess risks & implementation of risk management techniques in
contracts (in the context of category management)

Solution

Risk assessment and management are critical components in contacts within the context of category management. Category management involves grouping similar products or services to achieve maximum value through strategic sourcing and supplier relationship management. This approach comes with its share of risks. Each risk involved is explained in detail and the mitigation of these risks (International Federation of Purchasing and Supply Management. (2023). Each risk is identified, analyzed, and prioritized using the probability of its occurrence and mitigations. The risks are categorized into partnership risks, legal risks, Operational risks, and commercial risks.

8.1 Partnership risks

Risks associated with collaboration with suppliers and stakeholders. These risks include issues such as supplier reliability, alignment of goals and values, and potential conflicts of interest. Effective partnership management is crucial for successful category management;

Table 6:Partnerships Risks

Source: CIPS Notes Summary

8.2 Legal risks

Risks related to compliance with laws, regulations, and contractual obligations. These risks include legal disputes, fines, or damage to reputation due to non-compliance or contractual breaches. Legal risks must be managed to ensure adherence to legal standards and protect organisational interests.

Table 7:Legal Risks

Source: CIPS Notes Summary

 

8.2 Operational risks

Risks in executing procurement strategies and managing day-to-day activities. These risks include supply chain disruptions, operational downtime, quality control issues, and technology failures. Effective operational risk management is essential for maintaining efficiency and minimizing disruptions in category management

Table 8:Operational Risks

Source: CIPS Notes Summary

 

 

8.2 Commercial risks

Financial risks affecting cost management, pricing, and market volatility. These risks include cost overruns, price fluctuations, market demand shifts, and supplier pricing strategies. Effective commercial risk management is crucial for optimizing costs and maintaining financial stability in category management.

Table 9:Commercial Risks

Source: CIPS Notes Summary

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