PAS 7000 brings transparency and cost savings to the procurement of supply chains

Offers an internationally defined framework of good practice for supplier prequalification

BSI, the business standards company, has launched PAS 7000, a supply chain information standard for suppliers and buyers at organisations of all sizes around the globe.

PAS 7000 Supply Chain Risk Management - Supplier prequalification helps answer three key questions relating to any organisation’s supply chain partners: Who are they? Where are they? Can they be relied upon?

The standard draws on the collective expertise of 240 professionals drawn from global industry associations and organisations, and addresses product, process and behavioural criteria for supplier prequalification.

PAS 7000 has been created in response to industry demand, with three-quarters of executives considering supply chain risk management important or very important, according to a study by Accenture.

It is a fundamental change that will hopefully increase transparency and trust in the supply chain

As supply chains increasingly span continents, and brands become ever more exposed due to the demand for increased transparency, the challenges for procurement teams to assess the suitability of suppliers increases. According to a study by Oracle, 63% of EMEA companies have experienced disruption to their value chain due to unpredictable events beyond their control in the last 12 months, at an average cost of £449,525 per incident for each company.

PAS 7000 provides companies with a uniform set of common information requirements that reduces duplication of effort in completing tender forms and aids procurement in bringing consistency to the supplier base. It establishes a model of governance, risk and compliance information for buyers to prequalify suppliers and confirm their intention and ability, to adhere to key compliance requirements. This in turn helps organisations make an informed decision about whether or not to engage with a potential supply chain partner.

Howard Kerr, Chief Executive at BSI, said: ‘Today’s consumers and employees demand integrity from the organisations they deal with. Acting with integrity requires confidence in all those involved in delivering a service, anything else risks brand reputation. The benefit of this new standard is that it helps brands to align their supply chain with their corporate values by adopting an internationally defined framework of good practice for supplier prequalification.'

The benefits of PAS 7000 include:

  • It is structured and presented to be equally accessible for both suppliers and buyers;
  • It is based on international consensus developed by procurement and supply chain professionals drawn from across the EU, US and APAC;
  • Includes a range of potentially relevant topic modules such as capacity and capabilities, environmental management, employment policies, business continuity, traceability and data protection;
  • The modular approach to the information required permits the building of respective modules into a customised matrix supported by a common set of application principles or rules;
  • Provides a degree of flexibility for tailoring the information to particular organisational needs while retaining a robust, repeatable approach;
  • Helps mitigate against risks and reputational damage.

Kerr adds: ‘This new information model approach involves a concept shift, away from that of ‘providing questions that are to be asked by buyers in order to solicit answers from suppliers’ to one where there is ‘a generally accepted information model that is provided by suppliers and that is acquired and used by buyers, as required’.

‘It is a fundamental change that will hopefully increase transparency and trust in the supply chain, as well as saving time and effort for both suppliers and buyers in the future.’

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