Supplier Risk Assessment

Topics: Management, Risk, Risk management Pages: 2 (429 words) Published: December 2, 2012

To overcome these challenges, companies mitigate supply chain interruptions and reduce risk with strategies and tactics that address supplier-centric risk at multiple stages in the relationship: On boarding: Bringing suppliers into the operation with registration that includes: A centralized supplier registration portal

Integration of third party performance, financial data and predictive indicators into the supplier profile Monitoring for stability beyond financial data, including:
Criminal and terrorists (i.e. Office of Foreign Assets Control) ties and operational performance Visibility into potential disruptions caused by geopolitical threats, acts of nature, etc. Cultivating strategic supplier relationships for the long-term: Leverage supplier scorecards for continuous improvement

Establish and use benchmarks for measuring supplier performance Creating a system for collaboration and supplier development Establish control across the extended enterprise:
Create integrated supplier networks
Extend performance management benchmarks to second and third tier suppliers [edit]Supplier risk in recession and recovery

In 2008-2009, manufacturers experienced the startling speed at which suppliers can move from stability to shutting down operations. The devastating impact of a crucial supplier failure has moved risk management from add-on service to mission-critical. With a new focus on risk management, manufacturers have seen value whether the economy is stagnant or thriving. With a transparent, accessible and comprehensive set of supplier information, manufacturers have been able to monitor suppliers for behavioral changes which contribute to overall stability, including: Changes in the supplier’s management team

EPA violations
OSHA incidents
Quality issues
Noticeable lags in response time to inquiries
OFAC violations
Changes in any of these conditions can be defined as parameters for raising an alert. For example, a financially stable...
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