Suppliers Risk Management

The supply chains have included multiple partners, across varied services and across the world. The use of third party suppliers in providing the key requirements by corporate is the trend now. The outsourcing activities have increased in number in the service and also in the cost efficiency. Until and unless a supplier risk management structure has not been made, the corporate are prone to unexpected risks.

While purchasing the requirements for the company it is mandatory to follow the below steps in order to get the best deal:

 Be specific on your requirements:

The expectations on the required material should be communicated to the supplier. Incomplete or unclear specifications might lead to interrupted supply or the desired requirement might not be provided. Before finalizing on the purchase the sample testing should be made at the supplier’s site.  

Simply do not go by what the supplier is saying about the required material:

Until a thorough audit is performed, you will not be able to get the desired quality of the product and you be taken for a ride if you are not vigilant.

Plan B should always be there as a backup strategy:

Depending on one supplier for the required material never works. A back up of the suppliers who would provide as per our requirements is always safe. One primary supplier should be there to supply as per our requirements and if required the requirement should be split between the primary and the other suppliers in order to limit the impact and also it works as an assurance to the supplier that we are also purchasing from them.

Be a good partner:

Developing a long lasting relationship with the suppliers is also important. Transparent communication helps in mutually beneficial relationship, innovations, quality, speed to market, and improved customer satisfaction. This mitigates the risk in the process and during crisis, these suppliers will be more than willing to work through it with us.