Every supplier comes with inherent risks. What this third party does can pose several challenges and threats for the client company. And the bigger the company is – in which case multiple suppliers could be involved – the bigger these challenges could be.
To mitigate the involved risks, organizations must have a well-defined risk management strategy that covers every aspect of the supply chain. Supplier risk management, in fact, has long been a key priority for procurement departments.
Custom Solutions to Manage Supplier Risks Effectively
At Beroe, we’re committed to help organizations effectively deal with these risks through comprehensive supplier risk and compliance solutions. As a leader in offering procurement intelligence and supplier compliance solutions, Beroe extends to assist your procurement teams to identify, assess, and mitigate risks, and thereby achieve streamlined processes, rewarding relationships with the suppliers, and seamless business continuity.
Our risk management solutions are automated and tailored to not just cater to your distinct needs adequately but also save you time, money, and hassle. We address the challenges in monitoring supplier financial risks through carefully customized solutions. This includes D&B risk ratings of 140 million suppliers on Beroe LiVE, real-time alerts when suppliers' ratings change, supplier datasets that cover diverse geographies and regions, and the flexibility to purchase select data points instead of the entire report.
Beroe also offers ‘Know Your Supplier’ (KYS) program, an industry-leading risk and compliance program. Now assess your suppliers based on several risk and compliance parameters, including sanctions, financial stress, regulatory issues, and more. From Nestle to Cameco, some of the world's leading brands have trusted Beroe's KYS program for supplier risk assessment.
For more information on supplier risk management services, contact Beroe.
Importance of Risk Management in Supply Chain
Partnering with the right supplier has plenty of benefits, right from enhancing your company's output and performance to saving you time and money. But then a big obstacle on the way is to find one such supplier that supports your goals and visions, and delivers you consistent returns per expectations. There could be times when your partnering supplier brings problems.
Associating with a third party adds a layer of vulnerability to your company. There are several supplier risks that you may be exposed to, including compliance risk, reputational risk, operational risk, financial risk, strategic risk, and more. This is why integrating a supply chain risk management strategy is the first crucial step for companies to stay ahead of the risks that threaten their operations, growth, and sustainability. After all, staying prepared for supply chain problems that can possibly disrupt the business is always a better idea than ending up in critical situations when your business is hurt and you don’t know what to do.
A well-defined supply chain risk management ensures quick response time in adverse or unexpected events. It helps detect risks early and thereon enables to manage those risks better. It supports companies to satisfy industry rules, regulations, and safety standards. Supplier risk management also helps maintain customer satisfaction and the company's brand value. It provides for optimal functioning of production and deliveries. These are just a few benefits of supplier and business risk management; reasons why procurement teams take risk management in the supply chain so seriously.
How to Manage Supplier Risk?
Depending on the business type, industry, and the kind of risks they are dealing with, a company can create a custom supply chain risk management strategy that effectively identifies, assesses, and manages their unique risks. In general, here are a few tips and steps to manage supplier risk and compliance:
Have a smart supplier selection process
This is the first step in the process. If you have the right suppliers by your side, you wouldn’t have to worry much about the potential risks in the supply chain.
So, it’s important that the procurement teams at companies have a stringent supplier selection process. It should involve doing all the checks on the supplier, learning more about them, talking to them and their clients, spending more time in the research, and then making an informed decision.
Decide on which data needs to be collected
What kind of supplier risk data do you need?
What supplier information is more relevant and critical for your company?
You need to determine what type of data is more important to optimize your supplier risk and how you're going to obtain that data. Collecting data, and subsequently assessing it, can be a challenge for procurement teams. In this, it's essential to choose a reliable and reputed source of data that can be trusted.
Outline supplier risk management audit process
Potential risks in the supply chain can only be identified when you do thorough auditing.
So, make this an integral part of the workflow wherein the procurement team audits supplier risks regularly.
This also means you need to have a defined supplier risk management audit process that lays down a clear path, addressing how your team will do the auditing, what steps it would take, and how it should respond once risks are identified.
Segment suppliers per the risks they pose
If you deal with multiple suppliers, you should categorize them per the risks they pose to your company.
After all, every supplier is unique and brings with it its own set of dynamics. So, segment them into different groups primarily based on the risks they pose. Secondary factors to categorize them can include performance level and spend.
Once you have different groups, it can help you prioritize suppliers and focus on those who are more important and bring more risks to your business.
Identify the right risk management solution
From collecting relevant data to assessing it and following up with an informed decision – it can all take a lot of time, energy, and resources. During critical times, prompt and timely action is essential.
This is why it's recommended to rely on good supplier risk and compliance solution providers like Beroe. Their solutions can arm you with powerful analytical tools and data points that add higher efficiency in identifying supplier risks and responding in a timely manner. Based on that, you can create a custom supplier risk management process and strategy.
Beroe: Trusted by Many for Supplier Risk Management
When it comes to procurement intelligence and supplier compliance solutions, Beroe is one of the most prominent names in the industry. The company is trusted by 400 out of Fortune 500 companies. Its Know Your Supplier (KYS) program is designed to help procurement teams manage supplier risks effectively.
KYS is a cloud-based offering that assesses suppliers across several risk parameters, including sanctions, financial stress checks, money laundering, corruption, fraud, regulatory issues, violation of international treaties, and more. It offers 100 percent coverage of your supply base and provides a deep dive audit of a part of your supply base.
Now, with Beroe's KYS, amplify your supplier risk and compliance management. Get clean supplier master, two-way supplier communication portal, end-to-end program, and unified supplier compliance dashboard that promise to deliver great benefits and the desired outcome.
Join our partner ecosystem and enjoy the KYS program. For more information, feel free to contact us.
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