Nicole Leonardi, Director of Corporate Accounts
Assessing supplier financial health
Risk preparedness in times of crisis
By Nicole Leonardi, Director of Corporate Accounts
It’s become glaringly apparent recently how important it is that global businesses understand their supply networks. As many supply chains were put to the test recently, practitioners were left wondering how to get back to business-as-usual, forced to take a good look at their suppliers.
Supply management professionals must have accurate insight into supplier financials, external markets, and legal regulations to build out effective risk and category management plans. Whether you are vetting and onboarding new suppliers, creating a category strategy, or assessing supplier financial health, there are a number of ways to collect important information.
In a CAPS survey, New Supplier Assessments (Sept. 2019), 94% of companies said they have a process to assess new suppliers - 44% of which assess all pending suppliers, with no exceptions. It’s possible for companies to collect and manage this data but the work is time- and resource-intensive.
With the global Coronavirus pandemic changing the face of supply chain management, it is now more important than ever to conduct effective assessments of your suppliers. When we asked 72 companies about their use of third-party software, 72% said they are using a software solution to monitor suppliers' financial health, although we expect this number to increase as the effects of Coronavirus are felt more deeply throughout global economies. Companies listed more than 24 providers for supplier financial health monitoring, with D&B being used by 45% of respondents (Supplier Assessment Tools, April 2020).
Supplier Assessment Tools takes a closer look at third-party tools used in the areas of category market intel, legal and regulatory requirements, human rights violations, and diverse supplier reporting. Providers are included for each area and respondents could state if the tool was meeting the needs of their organization.