Most organisations have critical/strategic supplier relationships that can significantly impact their revenue and profit. However, these suppliers are not always defined nor have tailored risk programs been developed. The problem intensifies across the supplier base and tail-end of spend. In some categories, there may be cases that even spending low amounts still requires a high amount of due diligence due to the overall risk with that supplier (e.g. contractors, hazardous waste, business continuity etc.).
The right level of visibility of the information that acts as key indicators of each supplier’s ability to perform, and the likelihood of a problem is often found wanting. Supplier databases are inaccurate and incomplete. Organisations may complete some high level of initial due diligence for their strategic suppliers but may not go to the appropriate level of detail. In addition, organisations don’t always conduct ongoing supplier due diligence. What’s more, individual business units may have different ways of managing their suppliers, making it difficult to compare and collate information across the entire operation.
