Running a business can often feel like a plate-spinning exercise.
Your business needs to be more than just competitive, it needs to be socially responsible and regulatory compliant too. This makes the task of managing supply chains even more complex for buyers. Properly managing your suppliers as well as delivering on your social, legal and business responsibilities requires the ability to balance risk and reward.
Sometimes you need to take risks on your suppliers, this is unavoidable when you’re part of a supply chain. What is avoidable though, is exposing your operations to an undue amount of risk by not performing due diligence or promoting transparency.
Here are our top tips for limiting your supplier risk.
Keep your risk assessments up-to-date
It can be easy to drop the ball when it comes to risk assessments. Even if you have a process to identify risks for new suppliers, many forget to carry out the same process for new products and services from already existing ones.
The false sense of security this can create could mean that you assign the same level of risk to new ventures and product lines when, in fact, you should be approaching them a little more cautiously.
We can help to reduce the labour-intensive element of risk assessments. When a supplier becomes a member of one of our communities, we create a risk profile based on all of their product offerings. Then, when businesses update their information as they change, we validate the new information.
This means buyers can easily identify where any risk may be and effectively manage it.
Make your due diligence ongoing
Due diligence shouldn’t be a task that gets ticked off at the start of a project and then filed away never to be looked at again. The degree and frequency of your assessments should be linked to how important the product supplier is to your operations.
Don’t just rely on publicly available information either, especially when it comes to financials. Be sure to constantly monitor supplier financials, insurance certificates, audit reports, vendor management policies and programs, country risk assessments, physical security policies, asset management and information security.
Supplier performance reporting is crucial to adding a layer of transparency and accountability to every level of your supply chain.
Automating this function and using the data to benchmark performance and generate feedback helps to reduce risk and encourage suppliers to improve their service offering. In a business environment where real-time information is increasingly available for almost every part of the supply chain, your suppliers should be constantly feeding data and changes back to you.
Focus on efficiency
Making your supply chain as efficient as possible can help to lower threat levels. Shorter supply chains lower your time to market, as well as making it much easier to track compliance.
We help to reduce cost and risk in supply chain management for buyers. Our collaborative industry sector communities bring the right kind of suppliers to you, and by validating their capability, competence and compliance, we help you be sure your risk levels are acceptable.
Our supply chain mapping can show you the suppliers who indirectly contribute components or services across your organisation’s extended supply chain to help you make an informed decision and limit supplier risk.
We put transparency at the centre of supply chains, helping you stay compliant and pick suppliers that are going to add to your operations.