-Supplier Risk Management is a Business Imperative -



  

Implementing this six-step process will help your company identify and mitigate risk while enhancing your companies’ success.


Because most companies lack the comprehensive process for identifying risk.


This six-step process will be instrumental to your company in the identification and mitigation of supply chain management risks.


Step 1. Define risk assessment: Could be defined as “procurement of any commodity or service which could have a material direct or indirect impact on your company and customers”. Such as interruption of the supply chain.

Step 2. Compare and contrast: Review a list of procured materials and services in Step 2. Then list the “critical” items that could interrupt your companies’ operations. Be sure to include all items, because failure to assess rick for even the smallest, least expensive component or service could create a supply chain interruption that could be detrimental to your company and customers.

Step 3. Seek executive management or professional consultants: Develop and execution of risk-mitigation plans will require professional resources outside the supply chain and many times outside your company. After reviewing the list of “critical” risks obtain executive or professional support to mitigate this process.

Step 4. Prioritize: Most companies leaders are surprised when they realize the number of risks identified – and that they must determine which ones to address first. Prioritize risks identified during the review, assessing each one. 

Step 5. Establish cross-functional teams: Because it’s impossible for a supply management organization to develop and execute a comprehensive supply risk mitigation plan (SRPM) in a vacuum, the identification and mitigation processes require participation from other organizations including professional consultants.

Step 6. Deliver status reports: The executive management or professional consultant must be kept apprised of both successes and challenges experienced by the team during the planning and execution of an (SRPM). Reporting success will act as a catalyst to stimulate executive management’s continued interest in and support of the supply risk management process.


Rewords of managing risk

Supply risk management is a complex subject – and a labor-intensive but necessary undertaking for your company to survive. It significantly reduces or eliminates the threat to your supply chains. By implementing this six-step process, you’ll be able to thoughtfully prepare for – and execute – your companies risk identification and mitigation while contributing to your company’s profitability and success.


BMS can assist your company perform this Supplier Risk Management process. BMS is on your side, call (405) 593 -6085 or email Mike@Business-MS.com today!