Supply chains have become more complex and global in scope. The patchwork of regulatory and reporting requirements, coupled with increased outsourcing, subcontracting, rising security threats, safety requirements, financial vulnerabilities and natural disasters, has made it more difficult than ever to fully assess supplier risk. Research has shown that the potential impact of supply chain disruptions can be serious and measurable, including reduction in share price by as much as seven percent and significant material effects on company value.
Suppliers that are further removed from the company’s immediate primary suppliers pose a major supply chain risk with almost 40 percent of reported supply chain disruptions originating with “Tier 2” and “Tier 3” suppliers. Traditional sources of information used to monitor supply chain risks such as financial scores, background reports and the occasional Google™ searches are no longer sufficient on their own because they are unable to uncover potential supplier business issues in near “real time.”
The good news is there are emerging business information tools now available to supply management professionals that use leading-edge business information to closely monitor key suppliers and create an “early warning” system for potential supplier risks across a range of categories including political, economic, societal, technological, legal and environmental.
Download our complimentary whitepaper to learn more about these tools and how market intelligence can help you mitigate risk in your supply chain.