Defining and Driving a World-Class Supplier Risk Management Program
Identifying and monitoring supplier risk on an enterprise-wide basis presents a difficult challenge for most companies. The continuous monitoring of crucial supplier risk components such as financial stability, insurance coverage, and regulatory compliance can be extremely complex on a global basis. Additional challenges of limited resources, applying consistent standards, and consolidated reporting add to the difficulty of proactively managing supplier risk.
In this paper, we will address the three primary supplier risk management considerations facing procurement organizations today and propose a solution that lightens procurement’s burden while strengthening key supplier relationships. The three primary considerations are:
The Problem:
Supplier risk management is a top corporate objective but identifying and continuously monitoring supplier risk on an enterprise-wide basis is a difficult challenge for most companies.
The Reality:
Managing suppliers in multiple countries as well as staying knowledgeable about the myriad of ever-changing global watch lists and compliance regulations is nearly impossible. Resources are limited, consistent standards are not applied, and consolidated reporting is difficult at best.
The Solution:
When partnering with a third-party to validate and monitor supplier risk, companies should ensure that the approach is founded on validated data and documents.