Work efficiently with a supplier means be sure that goods and services agreed are provided as previously defined. In fact, risk to be involved in disruption in supply chain is very negative because impact directly production capacity.
It can be avoided only having a good knowledge of the supplier from different risk aspects.
Let’s see together main steps to follow in this process:
1.Step one
The relationship with a supplier requires a deep level of trust. For a company it is a matter of delegating the production to an external partner and this implicates a high risk of loss if it is not able to complete the activity. For this reason, it is necessary to pay close attention to the choice of these associates.
In this case, it is particularly important to determine at first the financial soundness, requiring a Full Report or a Slim Reportand checking the rating and risk assessment on the business in question. In this way, it is possible attest that the partner is not in a situation of economic difficulty and have no complications that could cause the interruption of the production chain.
2. Step two
The suppliers' situation can change over time. They can run into financial crises, management changes, internal problems or other eventualities that may negatively affect your business under the productive or reputational point of view.
Once checked the supplier conformity, equally important is activate the Monitoring service on him, keep informed about its situation to prevent every kind of threat.
Once again, the next step is the assessment of supplier’s reliability, in order to avoid to be associated with subjects involved in illegal activities or not compliant with regulations.
The most accurate process to ensure that our suppliers are not on lists related to money laundering, fraud, or even terrorism is to check by requesting specific Compliance and Extended Check Report.
4. Step four
Another aspect to take in consideration is the supplier exposure at the cybercrime. A company can be at risk not only in the case of financial issues or fraud, but also a cyber-attack or a data breach can cause business and reputational damages, regulatory and compliance issues. Especially in the complex system of the supply chain, businesses must be vigilant against cyber-attack, because it have the potential to damage less secure elements in the supply network.
To do all the needed checks you can use the KYND Cyber Risk Report, applying pioneering cyber risk technology and expertise to show simply and easily the cyber risks a company faces.
5. Step five
Evaluate a supplier means have a clear picture about all aspects of financial performances. One of the most important, but at the same time not simple to evaluate, if the one related to Intangible Assets in which Patents are included. It means understand the real value of the company itself and also have a clear picture related to the approach about Research and Development.If Patents are the most common intangible assets that are used to evaluate companies worldwide, having a supplier very active in registering Patents, discover their geographical coverage and the remaining life can give good information about reliability and ability in avoiding interruption in supply.
