In the past, risk management was largely about switching from unreliable suppliers or ensuring compliance with agreed service levels. Today, that’s just the beginning of the challenge facing the profession. The volatility of modern supply chains requires a more dynamic, data-driven and holistic approach to risk, one that goes beyond spreadsheets and static supplier assessments. 

The good news is that the manufacturing sector’s procurement leaders now have access to a new generation of technology solutions that are designed for this environment. Source-to-contract platforms offer real-time visibility, predictive insights, and built-in agility, giving businesses the tools to make smarter, faster, and more resilient procurement decisions. 

The risk landscape has shifted 

The global business environment has fundamentally changed over the past five years. The pandemic exposed the fragility of lean, just-in-time supply chains. Since then, the list of disruptive forces has grown to include wars in Ukraine and the Middle East, economic sanctions, climate-related events, inflation and labour shortages across critical sectors. According to the Australian Bureau of Statistics, nearly one in five businesses (19 per cent) reported supply chain disruptions in 2024, up from 15 per cent the previous year. 

For procurement leaders, this means risk can arise from almost anywhere and often without warning. A supplier operating in a previously stable region may suddenly become inaccessible. A shipping lane may close due to military action or piracy. A raw material price may spike due to climate-related harvest failure. These scenarios are no longer theoretical. 

The latest McKinsey Global Supply Chain Leader Survey suggests that when it comes to supply chain resilience, companies are taking their foot off the gas. 

Traditional risk models, which rely on past performance and static supplier records, are ill-equipped to deal with these variables. A supplier with a perfect track record may still be highly exposed to geopolitical, environmental or financial instability. Risk is now dynamic and procurement must be as well. 

Procurement must become a real-time function 

To respond effectively to today’s risk environment, procurement needs real-time intelligence and adaptive processes. This is where advanced source-to-contract platforms come into play. These cloud-based solutions bring together supplier onboarding, risk scoring, contract management and performance tracking into a single ecosystem and most importantly, they do it in real time. 

Instead of relying on annual supplier reviews, source-to-contract platforms enable continuous risk monitoring. Integration with external data sources, such as financial rating agencies, Environmental, Social and Governance (ESG) data providers and geopolitical risk indices, allows procurement teams to detect red flags early.  

Whether it’s a decline in a supplier’s credit rating, exposure to a sanctioned country such as Russia, or a sudden drop in delivery performance, these source-to-contract tools ensure that procurement teams can identify and address these risks before they become a crisis. 

Contract agility reduces exposure 

One of the most overlooked aspects of risk mitigation is contract design. In a volatile environment, static and inflexible contracts can become liabilities. Source-to-contract platforms make it easier to develop agile contract frameworks that include built-in contingencies, such as tiered pricing, alternate supplier clauses, or force majeure provisions tailored to today’s risks. 

With a digital source-to-contract solution, procurement teams can also automate renewal alerts, trigger renegotiations based on predefined thresholds and track contract performance over time. This level of agility ensures that organisations are well prepared when circumstances change. 

Building resilience in Australian supply chains 

Australia’s unique geography and import dependency make supply chain risk even more pronounced here. Domestic manufacturers rely heavily on overseas imports, whether it’s electronic components, metals, textiles or pharmaceuticals.  

To remain competitive and compliant, procurement leaders in manufacturing must proactively build resilience into their supply chains. This means diversifying suppliers across regions, strengthening local partnerships, embedding ESG considerations into supplier evaluation and embracing digital tools that enable rapid response. 

Advanced source-to-contract platforms allow procurement teams to map their supply chains visually, identify single points of failure and build redundancy into critical categories. This not only helps mitigate disruption but also supports regulatory compliance, especially as ESG reporting standards become more stringent across the Asia Pacific region. 

The future of procurement is proactive 

Risk is not going away; in fact, it’s likely to become even more complex. AI-generated fraud, tightening ESG regulations and the ongoing reconfiguration of global trade alliances all point to a future where procurement will be on the frontline of enterprise risk management. 

To thrive in this future, procurement teams must shift from being reactive cost centres to strategic enablers of resilience. By embracing a source-to-contract platform, Australian manufacturers can move beyond outdated risk models and take control of uncertainty.