Procurement risk evaluation from a big-data perspective: A case study of a procurement service company

In the environment of globalization and specialization, enterprises are facing increasing risks in all aspects of their supply chain management. By enhancing the data "visibility", the cross-boundary big data and its analytical techniques have provided a new means of risk evaluation and risk management. This paper focuses on the procurement function of enterprise operations management and investigates several issues in procurement risk evaluation from the big-data perspective. Based on a survey of the procurement process of a typical purchasing service company, we propose a "5+X" framework to classify the risks involved in procurement. Specifically, we consider environment risk, competition risk, moral risk, financial risk, fulfillment risk, and internal-control risk. For each category of risk, we propose the potential data source and its handling techniques. Based on an illustrative case study, we demonstrate the implementation steps of procurement risk assessment based on big data analytics.