How to Identify, Assess and Mitigate Financial Risk
When a supplier is showing signs of financial distress, actions you can take for managing financial risk in your supply network include:
- Assess the strategic value of the supplier to your organization. How critical are they and how hard would they be to replace?
- Map out the interconnectivity of your suppliers to understand the potential impact across your supply chain.
- Identify and source alternative suppliers. Diversify your supplier base for a category in advance of a sudden risk event, or hold alternatives on retainer if possible.
The Role of Technology
Most companies conduct financial health checks during supplier selection and onboarding, but that’s not enough. The comprehensive supply chain risk management strategy of The riskmethods SolutionTM includes real-time monitoring to detect up-to-the minute signs of distress. We provide early warnings, so you are able to use preventive risk management and we cancel out the noise, to make sure you receive data relevant to your organization. Additionally, riskmethods works with premium content partners, including RapidRatings, Creditsafe, Bureau van Dijk, Dun & Bradstreet, to feed your risk profiles with specialized financial risk information.
When you are aware of red flags, you can be ahead of financial risk, react faster, be better prepared, and proactively have action plans in place. riskmethods AI-based technology enables you to effectively manage financial risk in your supply network, to ensure business continuity, save time and costs, and gain competitive advantage.
For more, read our new whitepaper: Managing Financial Risk in Your Supply Network