How Do You Decide Who’s In and Who’s Out?
Global companies with large, extended supply chains continue to invest time and money in formal risk management programs. However, with thousands of suppliers, it’s nearly impossible with current capabilities to keep an eye on all of them. That’s why most companies carefully “screen” their suppliers using the criteria above to determine which ones are included in the supplier risk program. And, once they’ve selected suppliers for a risk program, 77 percent of companies apply additional criteria to categorize suppliers or place them in risk tiers or levels.
What Criteria Do You Use to Identify Suppliers for Your Company’s Strategic Supplier Development Program?
Global corporations often have massive numbers of suppliers they do business with on a regular basis. Many of these are small suppliers with constrained resources in capital, infrastructure, leadership or technology. As a result, they can benefit from support to increase performance. Most companies can’t afford to include all of these suppliers in a formal supplier development program, so they use screening criteria to determine which ones to include. The above graphic highlights the criteria most often used by companies.
Which Metrics Get Used Most?
The numbers reflect the percentage of organizations that include the listed metrics in their contract audit reporting, whether audits are conducted internally or by a third party. How does your organization compare?