Financial Risk Mitigation
Have confidence your partners are capable
of fulfilling all their service and contract obligations
Suppliers are given a Financial Stability Risk Score (1-100) that indicates their likelihood of defaulting on financial obligations or going bankrupt.
Suppliers also receive an Intelliscore Plus rating that identifies the suppliers who may be slow to pay but are likely to follow through on their financial commitments.
Any liens, judgments, or bankruptcies from the supplier are also displayed on the Connect dashboard.
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Why Is Supplier Risk Management Important?
All supply chains must deal with some level of risk, which is why supplier risk management is so essential. This practice allows companies to better prepare for sudden demand, emergencies, natural disasters, and other supply chain disruptions by considering all possible outcomes and solutions.
How Do You Mitigate Supplier Risk?
Companies can mitigate supplier risk by choosing reliable, diverse suppliers, being transparent with suppliers, and by continuously reviewing potential risks. They can also create a supply chain risk management plan, which includes a risk assessment, quantification of risk, and plans for what to do in various scenarios.
How Do You Write a Supply Chain Risk Management Plan?
A supply chain risk management plan should be tailored to the needs of your specific company, but here are some of the most common elements of any plan:
- Assessment of risk
- Quantification of risk
- Evaluation of alternative suppliers
- Plans for how to communicate with suppliers in case of an emergency
- Steps to qualify new suppliers
- If/then scenario planning
Why Is Vendor Management Important?
Vendor management is important in any supply chain because it helps to control expenses, minimize risks, and hold vendors accountable. It also places more value on vendor relationships, which can improve the overall supply chain management process.
What Are the 3 Types of Risk?
Supply chains face different risks depending on the industry, but many fall into these three categories:
- Natural disasters
- Man-made emergencies
- Economic catastrophes
What Is the First Step in Risk Management?
With any supply chain, the first step in risk management is to identify all potential risks. This means analyzing every type of risk that could disrupt or influence the supply chain, from economic issues and market risks to natural disasters and social events.
How Do You Mitigate Risk in a Global Supply Chain?
There are five main steps to mitigating risk in a global supply chain, including:
- Identify risks
- Analyze risks
- Prioritize risks
- Mitigate risks or create a response plan
- Monitor risks
How Do You Manage Supply Chains?
Supply chain management requires a constant analysis of risks and an ongoing effort to streamline supply chain processes. Some of the best practices for managing supply chains include:
- Vetting suppliers
- Choosing diverse suppliers
- Requiring supplier insurance
- Creating a risk management plan
How Do You Assess Supplier Risk?
Companies can assess supplier risk by creating a checklist to measure every potential supplier against before making an agreement. Here are some factors to consider when evaluating a supplier:
- Reputation and reliability
- Financial stability
- Compliance and security
- Safety and health practices
What Is the Difference Between Vendor and Third Party?
A vendor supplies goods and services to a company, while a third-party supplies goods and services directly to a customer. Hence, a vendor is a broader term, while third-party vendors are a subset of the category.
What is Experian?
Experian's Business Information Services is a leader in providing data and predictive insights to businesses. Their business database provides comprehensive, third-party-verified information on 99.9% of all U.S. companies, with the industry’s most extensive data on the broad spectrum of small and midsize businesses.