Risk Management in Procurement
Procurement risk assessment, mitigation and residual-risk sign-off as an input to supplier and award decisions.
Group Policy & Procedure | Document No. | P-POL-016 |
Group Supply Chain | Ver. No. | Rev Date | 0.4 | 08 APR 2026 |
Title: Risk Management in Procurement | Effective Date | 08 April 2026 |
BUKHATIR GROUP
Strength through Diversity
Group Policy and Procedure
Group Supply Chain (GSC)
Risk Management in Procurement
Assessment, Mitigation & Register
Document No: P-POL-016
Copyright © 2026 Bukhatir Group
Revision Control
This document is issued under the authority of Bukhatir Group and applies when carrying out the activities described. Revisions may be issued as necessary under the authority of the Group Head of Procurement. Revision history is recorded below with every revised policy.
Revision History
Ver. No. | Effective Date | Description |
|---|---|---|
02 | September 2016 | Original Procurement Policy |
0.3 | March 2026 | Procurement Policy – Risk Management in Procurement |
0.4 | 08 April 2026 | Redesign, content modernization & flowcharts – Risk Management in Procurement |
Revision Sign-Off
Approving Committee | Name | Signature |
|---|---|---|
Endorsed by — Group Head of Supply Chain | Mohamad Koussa | |
Reviewed by — BIIL CEO | Mr. Ayman Ismail | |
Reviewed by — Group Chief Financial Officer | Mohamad Adnaan Sait | |
Approved by — Group Vice Chairman & Group CEO | Mr. Salah Bukhatir |
Distribution List
# | Departments |
|---|---|
1 | Business Unit Procurement Departments |
2 | Group Supply Chain (GSC) |
3 | Finance, Legal, Compliance, Internal Audit |
4 | Business Unit Management |
1. Purpose
This policy establishes a structured approach to identifying, assessing, treating and monitoring risk across procurement and supply chain activities.
2. Scope
Applies to all sourcing events, supplier relationships, contracts and supply chain operations across the Group.
3. Risk Categories
Category | Examples |
|---|---|
Supply | Single-source dependency, supplier insolvency, capacity shortfall |
Demand | Forecast volatility, project cancellations |
Price | Commodity volatility, FX exposure, inflation |
Quality | Defects, recalls, non-conformance |
Compliance | Sanctions, anti-bribery, labour law, data protection |
Geopolitical | Border closures, sanctions, trade restrictions |
Cyber | Supplier breach, ransomware affecting ERP integrations |
ESG | Climate, human rights, environmental incidents |
4. Risk Assessment
A documented risk assessment is required for all orders and contracts above AED 500,000. The assessment rates likelihood (1–5) and impact (1–5). The resulting risk score drives mitigation requirements. BU Procurement shall share signed risk assessment forms with GSC in a timely manner.
5. Mitigation Strategies
- Dual-sourcing or multi-sourcing for critical categories.
- Safety stock and buffer inventory for high-risk items.
- Long-term framework agreements with price escalation clauses.
- Performance bonds, parent company guarantees, advance payment guarantees.
- Business continuity clauses and supplier BCM plans for Tier 1.
- Cyber due diligence for all suppliers handling Group data.
6. Risk Register
GSC maintains a Procurement Risk Register, reviewed monthly and escalated to the GSC–BU Steering Committee quarterly.
7. Reference Form
Form F-RSK-01 — Procurement Risk Assessment Form.
8. Definitions & Acronyms
Acronym / Term | Definition |
|---|---|
AED | United Arab Emirates Dirham |
BU | Business Unit |
DOA | Delegation of Authority |
GSC | Group Supply Chain |
KPI | Key Performance Indicator |
Oracle | Enterprise Resource Planning System |
TCO | Total Cost of Ownership |