Role of digitalization in supply chain management

OMV continues its journey toward procurement digitalization. OMV further developed the SAP Ariba modules already in place since 2018 by adding Supplier Risk.

Understanding a supplier’s risk is an important factor in deciding whether and how we do business with the supplier.

Through SAP Ariba, we can now receive daily alerts about our registered suppliers. The alerts are assigned a low, medium, or high risk level. The risk is calculated automatically based on around 150 incidents collected from publicly available information, such as newspapers, press releases, company homepages, etc. The incidents are split into four risk categories: Environmental and Social, Finance, Regulatory and Legal, and Operations. In 2019, we defined a supplier risk monitoring process in full alignment with OMV’s risk management approach. Based on this process, we perform several analyses to check whether the alerts received would prevent us from continuing to work with the respective supplier. The outcome of such analyses is also shared with the supplier as a next step to introduce further mitigation measures, such as verification, follow-up actions, etc. The process ends with an internal analysis concluding whether continuing our partnership with the respective supplier is recommended or not.

The digital integration of all these risk elements into one system, SAP Ariba, will simplify the information evaluation process, improve the mitigation management plan and, last but not least, support our supply chain in improving its preventive risk management process.