How can you manage supplier risk?
Dan White
Regional Sales Director
BvD UK & Ireland
Risk – it’s not a new issue?
UK companies liquidated or placed into receivership in the last two weeks
1,730
90 of those had more than 50 employees
What is procurement?
“Increase quality whilst reducing cost and avoiding risk.”
1. Financial risk
2. Reputational risk
3. Incorporating risk measures into your workflow
Supply chains are vital to the successful performance of a company
Deliverables against margin means procurement teams are increasingly concerned with risk and ways to identify it
It’s not as simple as “I buy goods from supplier A”
To make it’s product supplier A buys from supplier C, D and E
Identification of risk is a challenge
Difficult to obtain an accurate & reliable picture of the financial health of a supplier
Procurement professionals are not always financial analysts
Where do I get data from? What does it mean?
The right data from the right external provider can help
The right data from the right external provider can help…
Initially many external providers look
the same
External content providers
Global
Quality content
Easy to interpret
Varied content
We engage with many procurement teams….
Good procurement teams seem to be agile when it comes to identifying risk
Make technology work for them
1. Financial Risk: New approaches to “see” risk
Not moving away from traditional methods but what else is out there
New companies have evolved who take a different view on risk
Help procurement teams see the bigger picture of supplier ……
Financial Strength: A wider view
Better to have several risk indicators than just one
Key supplier – multi-million construction project
Basic credit score tells us this company is healthy
Different suppliers required different approaches
Key strategic suppliers
Indirect suppliers
Don’t forget the real world
Good providers of external content should bring other “warning” signs of risk
News
Adverse documents
Should be easily deliverable into procurement teams
Information – knowledge - actions
2. Reputational Risk
“Increase quality whilst reducing cost and avoiding risk.”
Do I really know who my supplier is?
Child labour & other such undesirable activity
Links to criminal activity (proven or unproven)
Bribery or corruption (alleged or proven)
How do we understand reputational risk?
Aggregated content of
Sanctions lists
Enforcements
Adverse media coverage
Help me see risk early
“Increase quality whilst reducing cost and avoiding risk.”
Decline in
Credit score
Adverse documents
Negative press
Where’s the risk in my supply chain?
“Increase quality whilst reducing cost and avoiding risk.”
Where does my supplier fit?
“Increase quality whilst reducing cost and avoiding risk.”
Connect to valuable intelligence
“Increase quality whilst reducing cost and avoiding risk.”
Successful procurement teams use external data to:
• Identify risk• Take steps to prevent risk• Enrich knowledge
“Increase quality whilst reducing cost and avoiding risk.”
Please do visit us on stand 7
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