ABSTRACT
The risk landscape of External Dependencies covers the situations where the customer company relies on suppliers to meet their obligations as set out in the purchase order or contract. It is important to distinguish between the physical means of supply and the ability and commitment of the supply company to supply in the first place. Both aspects of External Dependency contain potential risks. Supplier fraud is an issue with ramifications in two areas, namely: External Dependencies and Management Controls. Effective Procurement Risk Management (PRM) of External Dependencies requires deep understanding of the steps in the physical supply chain; of the supply company at the end of it, and the individual who represents that company as a customer account manager. Once the supply chain is mapped as a flow chart it is easier to conduct a vulnerability analysis, although this requires some creativity in imagining what disruptive events might occur at each link in the chain.
