Information technology procurement risk management in fast moving consumer goods industry
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Feb 28, 2025
Keywords:
FMCG, FMEA, Information technology, Procurement, Risk management
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Informtion System
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Abstract
Information Technology procurement is very crucial for companies in the Fast Moving Consumer Goods industry. The rapid product cycles of the industry require continuous launches of new products. This calls for the implementation of modern information technologies in every aspect of the supply chain in order to run operations smoothly and to be competitive. Fast Moving Consumer Goods companies need to ensure that information technologies that are needed for such purpose are procured and implemented. However, there are various risks that arise from IT Procurement in the Fast Moving Consumer Goods industry. To address this matter, this study developed an FMEA-based risk management template that are adjusted to the context of Fast Moving Consumer Goods industry. This study found 27 risks that are related to IT Procurement and develop risk treatment strategies for each of the risks. The risks with the highest RPN scores are mostly related to technological issues and vendor issues. Fast Moving Consumer Goods companies can use this FMEA-based risk management template as a starting point to develop a risk management strategy that are adjusted to their situation and context
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Yovita Louwisia, F. J. . and Andika, A. (2025) “Information technology procurement risk management in fast moving consumer goods industry”, Jurnal Mantik, 8(4), pp. 1686-1695. Available at: https://www.iocscience.org/ejournal/index.php/mantik/article/view/5983 (Accessed: 24April2025).
References
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Alshehhi, K., Cheaitou, A., & Rashid, H. (2023). Fuzzy Failure Modes Effect and Criticality Analysis of the Procurement Process of Artificial Intelligent Systems/Services. International Journal of Advanced Computer Science and Applications, 14(10), 562–570. https://doi.org/10.14569/IJACSA.2023.0141060
Arora, P., & Singh, H. (2014). Identification of Critical Risk Phase in Commercial-off-the-Shelf Software (CBSD) using FMEA Approach. Global Journal of Computer Science and Technology (C), 14(2). https://gjcst.com/index.php/gjcst/article/download/1239/1233/2466
Asllani, A., Lari, A., & Lari, N. (2018). Strengthening information technology security through the failure modes and effects analysis approach. International Journal of Quality Innovation, 4(1), 1–14. https://doi.org/10.1186/s40887-018-0025-1
Bahrami, M., Bazzaz, D. H., & Sajjadi, S. M. (2012). Innovation and improvements in project implementation and management; using FMEA technique. Procedia-Social and Behavioral Sciences, 41, 418–425. https://doi.org/10.1016/j.sbspro.2012.04.050
Barosz, P., Dudek-Burlikowska, M., & Roszak, M. (2018). The application of the FMEA method in the selected production process of a company. Production Engineering Archives, 18(18), 35–41. https://doi.org/10.30657/pea.2018.18.06
Boccaletti, B. C., de Brito Mello, L. C. B., & de Paula Bastos, I. (2021). Principal causes and challenges for reducing product returns: Applying FMEA in a case study. Gestao e Producao, 28(2), 1–23. https://doi.org/10.1590/1806-9649-2020V28E5115
Brown, J., Flynn, R., Addicoat, A., & Kilpatrick, J. (2021, October 26). Tap Indirect Procurement as a Source of Savings. Wsj.Com. https://deloitte.wsj.com/cfo/tap-indirect-procurement-as-a-source-of-savings-01635188295
Creazza, A., Colicchia, C., Spiezia, S., & Dallari, F. (2022). Who cares? Supply chain managers’ perceptions regarding cyber supply chain risk management in the digital transformation era. Supply Chain Management, 27(1), 30–53. https://doi.org/10.1108/SCM-02-2020-0073
Curkovic, S., Scannell, T., & Wagner, B. (2015). Using FMEA for Supply Chain Risk Management. Managing Supply Chain Risk, March 2016, 40–57. https://doi.org/10.1201/b18610-5
Currie, M. (2023, June 11). Wasted Tech Spend is 30% of IT Spend. Cio-Office.Com. https://cio-office.com/wasted-tech-spend-is-30-of-it-spend/
David Olanrewaju Olutimehin, Ekene Ezinwa Nwankwo, Onyeka Chrisanctus Ofodile, & Chinonye Esther Ugochukwu. (2024). Strategic Operations Management in FMCG: a Comprehensive Review of Best Practices and Innovations. International Journal of Management & Entrepreneurship Research, 6(3), 780–794. https://doi.org/10.51594/ijmer.v6i3.935
De Barros, A. P., Ishikiriyama, C. S., Peres, R. C., & Gomes, C. F. S. (2015). Processes and benefits of the application of information technology in supply chain management: An analysis of the literature. Procedia Computer Science, 55, 698–705. https://doi.org/10.1016/j.procs.2015.07.077
Delke, V., Schiele, H., & Buchholz, W. (2023). Differentiating between direct and indirect procurement: roles, skills, and Industry 4.0. International Journal of Procurement Management, 16(1), 1–30. https://doi.org/10.1504/IJPM.2022.10050671
Fabis-Domagala, J., Domagala, M., & Momeni, H. (2021). A concept of risk prioritization in FMEA analysis for fluid power systems. Energies, 14(20), 6482. https://doi.org/10.3390/en14206482
Gartner. (2024, October 23). Gartner Forecasts Worldwide IT Spending to Grow 9.3% in 2025. Gartner.Com. https://www.gartner.com/en/newsroom/press-releases/2024-10-23-gartner-forecasts-worldwide-it-spending-to-grow-nine-point-three-percent-in-2025
George, A. S., & Hovan George, A. S. (2023). Digital Dilemma: The Consequences of Insufficient IT Expertise in the Fast-Moving Consumer Goods Industry. Partners Universal International Innovation Journal (PUIIJ), 1(03), 1–24. https://doi.org/10.5281/zenodo.8066759
Gulati, N. (2015). Enterprise Risk Management in FMCG Sector. International Journal of Science, Technology & Management, 04(01), 1–10. https://www.ijstm.com/images/short_pdf/105a.pdf
H?bek, P., & Molenda, M. (2017). Using the FMEA method as a support for improving the social responsibility of a company. International Conference on Operations Research and Enterprise Systems, 2, 57–65. https://doi.org/10.5220/0006118600570065
Harju, A., Schaëfer, K., Hallikas, J., & Kähkönen, A. K. (2024). The role of risk management practices in IT service procurement: A case study from the financial services industry. Journal of Purchasing and Supply Management, 30, 100899. https://doi.org/10.1016/j.pursup.2024.100899
Jung, G., & Shim, S. (2013). Migration of Workers’ Knowledge into Information Systems: Managerial Issues from the Case of e-Procurement Service Company. The Journal of Society for E-Business Studies, 18(2), 47–67. https://doi.org/10.7838/jsebs.2013.18.2.047
Koomsap, P., & Charoenchokdilok, T. (2018). Improving risk assessment for customer-oriented FMEA. Total Quality Management and Business Excellence, 29(13–14), 1563–1579. https://doi.org/10.1080/14783363.2016.1274229
Li, F., Rogers, L., Mathur, A., Malkin, N., & Chetty, M. (2019). Keepers of the machines: Examining how system administrators manage software updates for multiple machines. Fifteenth Symposium on Usable Privacy and Security (SOUPS 2019), 273–288. https://www.usenix.org/conference/soups2019/presentation/li
Marie, I. A., Sugiarto, D., Surjasa, D., & Witonohadi, A. (2018). Knowledge management system for risk mitigation in supply chain uncertainty: Case from automotive battery supply chain. IOP Conference Series: Earth and Environmental Science, 106(1). https://doi.org/10.1088/1755-1315/106/1/012018
Mohammad, W., Elomri, A., & Kerbache, L. (2022). The Global Semiconductor Chip Shortage: Causes, Implications, and Potential Remedies. IFAC-PapersOnLine, 55(10), 476–483. https://doi.org/10.1016/j.ifacol.2022.09.439
Öhrberg, C. (n.d.). Indirect procurement: Significate cost but rarely in focus. Axholmen.Com. https://axholmen.com/indirect-procurement/
Paletta, F. C., & Vieira Junior, N. D. (2013). ICT Lifecycle and its major Role in the Development of Strategic Intelligence. Journal of Intelligence Studies in Business, 3(2), 62–78. https://doi.org/10.37380/jisib.v3i2.70
Procurify. (2024, October 22). Direct vs Indirect Procurement: What’s the Difference? Procurify.Com. https://www.procurify.com/blog/direct-vs-indirect-procurement/
Qalati, S. A., Zafar, Z., Fan, M., Sánchez Limón, M. L., & Khaskheli, M. B. (2022). Employee performance under transformational leadership and organizational citizenship behavior: A mediated model. Heliyon, 8(11). https://doi.org/10.1016/j.heliyon.2022.e11374
Rajivan, P., Aharonov-Majar, E., & Gonzalez, C. (2020). Update now or later? Effects of experience, cost, and risk preference on update decisions. Journal of Cybersecurity, 6(1), 1–12. https://doi.org/10.1093/CYBSEC/TYAA002
SAP. (2024, July 24). Direct vs. indirect procurement—what’s the difference? SAP.Com. https://www.sap.com/resources/direct-vs-indirect-procurement
Sharma, K. D., & Srivastava, S. (2018). Failure mode and effect analysis (FMEA) implementation: a literature review. J Adv Res Aeronaut Space Sci, 5(1–2), 1–17. https://www.adrjournalshouse.com/index.php/Jof-aeronautics-space-science/article/view/381
Shepherd, D. (2024, March 18). Why DNS exploits continue to be a top attack vector in 2024. Tahawultech.Com. https://www.tahawultech.com/insight/why-dns-exploits-continue-to-be-a-top-attack-vector-in-2024/
Sherif, A. (2024, June 14). IT spending as share of company revenue in 2022 and 2023, by industry. Statista.Com. https://www.statista.com/statistics/1105798/it-spending-share-revenue-by-industry/
Tran, C. (2022, February 3). Why It’s Important To Equip Your Employees With The Right Tools. Forbes.Com. https://www.forbes.com/councils/forbescommunicationscouncil/2022/02/03/why-its-important-to-equip-your-employees-with-the-right-tools/
Yoewono, H. (2023). The Influence of Company Size , Leverage , Profitability and Liquidity on Company Value ( Study of Consumer Goods Industry Companies Listed on the Indonesian Stock Exchange in Period 2018-2020 ). INSOMA International Journal of The Newest Social and Management Research, 1(2), 112–122. https://doi.org/10.59693/insoma.v1i2.26
Yukhymenko-Lescroart, M. A., Goldman, S. R., Lawless, K. A., Pellegrino, J. W., & Shanahan, C. R. (2022). Assessing information synthesis within and across multiple texts with verification tasks: a signal detection theory approach. Educational Psychology, 42(5), 549–566. https://doi.org/10.1080/01443410.2020.1811840
Aldrin, N., & Yunanto, K. T. (2019). Job Satisfaction as a Mediator for the Influence of Transformational Leadership and Organizational Culture on Organizational Citizenship Behavior. The Open Psychology Journal, 12(1), 126–134. https://doi.org/10.2174/1874350101912010126
Alshehhi, K., Cheaitou, A., & Rashid, H. (2023). Fuzzy Failure Modes Effect and Criticality Analysis of the Procurement Process of Artificial Intelligent Systems/Services. International Journal of Advanced Computer Science and Applications, 14(10), 562–570. https://doi.org/10.14569/IJACSA.2023.0141060
Arora, P., & Singh, H. (2014). Identification of Critical Risk Phase in Commercial-off-the-Shelf Software (CBSD) using FMEA Approach. Global Journal of Computer Science and Technology (C), 14(2). https://gjcst.com/index.php/gjcst/article/download/1239/1233/2466
Asllani, A., Lari, A., & Lari, N. (2018). Strengthening information technology security through the failure modes and effects analysis approach. International Journal of Quality Innovation, 4(1), 1–14. https://doi.org/10.1186/s40887-018-0025-1
Bahrami, M., Bazzaz, D. H., & Sajjadi, S. M. (2012). Innovation and improvements in project implementation and management; using FMEA technique. Procedia-Social and Behavioral Sciences, 41, 418–425. https://doi.org/10.1016/j.sbspro.2012.04.050
Barosz, P., Dudek-Burlikowska, M., & Roszak, M. (2018). The application of the FMEA method in the selected production process of a company. Production Engineering Archives, 18(18), 35–41. https://doi.org/10.30657/pea.2018.18.06
Boccaletti, B. C., de Brito Mello, L. C. B., & de Paula Bastos, I. (2021). Principal causes and challenges for reducing product returns: Applying FMEA in a case study. Gestao e Producao, 28(2), 1–23. https://doi.org/10.1590/1806-9649-2020V28E5115
Brown, J., Flynn, R., Addicoat, A., & Kilpatrick, J. (2021, October 26). Tap Indirect Procurement as a Source of Savings. Wsj.Com. https://deloitte.wsj.com/cfo/tap-indirect-procurement-as-a-source-of-savings-01635188295
Creazza, A., Colicchia, C., Spiezia, S., & Dallari, F. (2022). Who cares? Supply chain managers’ perceptions regarding cyber supply chain risk management in the digital transformation era. Supply Chain Management, 27(1), 30–53. https://doi.org/10.1108/SCM-02-2020-0073
Curkovic, S., Scannell, T., & Wagner, B. (2015). Using FMEA for Supply Chain Risk Management. Managing Supply Chain Risk, March 2016, 40–57. https://doi.org/10.1201/b18610-5
Currie, M. (2023, June 11). Wasted Tech Spend is 30% of IT Spend. Cio-Office.Com. https://cio-office.com/wasted-tech-spend-is-30-of-it-spend/
David Olanrewaju Olutimehin, Ekene Ezinwa Nwankwo, Onyeka Chrisanctus Ofodile, & Chinonye Esther Ugochukwu. (2024). Strategic Operations Management in FMCG: a Comprehensive Review of Best Practices and Innovations. International Journal of Management & Entrepreneurship Research, 6(3), 780–794. https://doi.org/10.51594/ijmer.v6i3.935
De Barros, A. P., Ishikiriyama, C. S., Peres, R. C., & Gomes, C. F. S. (2015). Processes and benefits of the application of information technology in supply chain management: An analysis of the literature. Procedia Computer Science, 55, 698–705. https://doi.org/10.1016/j.procs.2015.07.077
Delke, V., Schiele, H., & Buchholz, W. (2023). Differentiating between direct and indirect procurement: roles, skills, and Industry 4.0. International Journal of Procurement Management, 16(1), 1–30. https://doi.org/10.1504/IJPM.2022.10050671
Fabis-Domagala, J., Domagala, M., & Momeni, H. (2021). A concept of risk prioritization in FMEA analysis for fluid power systems. Energies, 14(20), 6482. https://doi.org/10.3390/en14206482
Gartner. (2024, October 23). Gartner Forecasts Worldwide IT Spending to Grow 9.3% in 2025. Gartner.Com. https://www.gartner.com/en/newsroom/press-releases/2024-10-23-gartner-forecasts-worldwide-it-spending-to-grow-nine-point-three-percent-in-2025
George, A. S., & Hovan George, A. S. (2023). Digital Dilemma: The Consequences of Insufficient IT Expertise in the Fast-Moving Consumer Goods Industry. Partners Universal International Innovation Journal (PUIIJ), 1(03), 1–24. https://doi.org/10.5281/zenodo.8066759
Gulati, N. (2015). Enterprise Risk Management in FMCG Sector. International Journal of Science, Technology & Management, 04(01), 1–10. https://www.ijstm.com/images/short_pdf/105a.pdf
H?bek, P., & Molenda, M. (2017). Using the FMEA method as a support for improving the social responsibility of a company. International Conference on Operations Research and Enterprise Systems, 2, 57–65. https://doi.org/10.5220/0006118600570065
Harju, A., Schaëfer, K., Hallikas, J., & Kähkönen, A. K. (2024). The role of risk management practices in IT service procurement: A case study from the financial services industry. Journal of Purchasing and Supply Management, 30, 100899. https://doi.org/10.1016/j.pursup.2024.100899
Jung, G., & Shim, S. (2013). Migration of Workers’ Knowledge into Information Systems: Managerial Issues from the Case of e-Procurement Service Company. The Journal of Society for E-Business Studies, 18(2), 47–67. https://doi.org/10.7838/jsebs.2013.18.2.047
Koomsap, P., & Charoenchokdilok, T. (2018). Improving risk assessment for customer-oriented FMEA. Total Quality Management and Business Excellence, 29(13–14), 1563–1579. https://doi.org/10.1080/14783363.2016.1274229
Li, F., Rogers, L., Mathur, A., Malkin, N., & Chetty, M. (2019). Keepers of the machines: Examining how system administrators manage software updates for multiple machines. Fifteenth Symposium on Usable Privacy and Security (SOUPS 2019), 273–288. https://www.usenix.org/conference/soups2019/presentation/li
Marie, I. A., Sugiarto, D., Surjasa, D., & Witonohadi, A. (2018). Knowledge management system for risk mitigation in supply chain uncertainty: Case from automotive battery supply chain. IOP Conference Series: Earth and Environmental Science, 106(1). https://doi.org/10.1088/1755-1315/106/1/012018
Mohammad, W., Elomri, A., & Kerbache, L. (2022). The Global Semiconductor Chip Shortage: Causes, Implications, and Potential Remedies. IFAC-PapersOnLine, 55(10), 476–483. https://doi.org/10.1016/j.ifacol.2022.09.439
Öhrberg, C. (n.d.). Indirect procurement: Significate cost but rarely in focus. Axholmen.Com. https://axholmen.com/indirect-procurement/
Paletta, F. C., & Vieira Junior, N. D. (2013). ICT Lifecycle and its major Role in the Development of Strategic Intelligence. Journal of Intelligence Studies in Business, 3(2), 62–78. https://doi.org/10.37380/jisib.v3i2.70
Procurify. (2024, October 22). Direct vs Indirect Procurement: What’s the Difference? Procurify.Com. https://www.procurify.com/blog/direct-vs-indirect-procurement/
Qalati, S. A., Zafar, Z., Fan, M., Sánchez Limón, M. L., & Khaskheli, M. B. (2022). Employee performance under transformational leadership and organizational citizenship behavior: A mediated model. Heliyon, 8(11). https://doi.org/10.1016/j.heliyon.2022.e11374
Rajivan, P., Aharonov-Majar, E., & Gonzalez, C. (2020). Update now or later? Effects of experience, cost, and risk preference on update decisions. Journal of Cybersecurity, 6(1), 1–12. https://doi.org/10.1093/CYBSEC/TYAA002
SAP. (2024, July 24). Direct vs. indirect procurement—what’s the difference? SAP.Com. https://www.sap.com/resources/direct-vs-indirect-procurement
Sharma, K. D., & Srivastava, S. (2018). Failure mode and effect analysis (FMEA) implementation: a literature review. J Adv Res Aeronaut Space Sci, 5(1–2), 1–17. https://www.adrjournalshouse.com/index.php/Jof-aeronautics-space-science/article/view/381
Shepherd, D. (2024, March 18). Why DNS exploits continue to be a top attack vector in 2024. Tahawultech.Com. https://www.tahawultech.com/insight/why-dns-exploits-continue-to-be-a-top-attack-vector-in-2024/
Sherif, A. (2024, June 14). IT spending as share of company revenue in 2022 and 2023, by industry. Statista.Com. https://www.statista.com/statistics/1105798/it-spending-share-revenue-by-industry/
Tran, C. (2022, February 3). Why It’s Important To Equip Your Employees With The Right Tools. Forbes.Com. https://www.forbes.com/councils/forbescommunicationscouncil/2022/02/03/why-its-important-to-equip-your-employees-with-the-right-tools/
Yoewono, H. (2023). The Influence of Company Size , Leverage , Profitability and Liquidity on Company Value ( Study of Consumer Goods Industry Companies Listed on the Indonesian Stock Exchange in Period 2018-2020 ). INSOMA International Journal of The Newest Social and Management Research, 1(2), 112–122. https://doi.org/10.59693/insoma.v1i2.26
Yukhymenko-Lescroart, M. A., Goldman, S. R., Lawless, K. A., Pellegrino, J. W., & Shanahan, C. R. (2022). Assessing information synthesis within and across multiple texts with verification tasks: a signal detection theory approach. Educational Psychology, 42(5), 549–566. https://doi.org/10.1080/01443410.2020.1811840
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