When you are looking for new supplier you have to also consider saving at what cost ? Understanding your suppliers and having a plan in place to deal with a breakdown in your supply chain are vital factors in mitigating business risk. The decision to outsource business processes and goods can however be fraught with danger. Too often companies are blinded by the initial savings without giving sufficient consideration to the increased reputational and financial risks from altering the supply chain.
From a business continuity perspective, plans should always be in place to mitigate this supply risk. These strategies including regular communication and provision of pertinent information between both parties, and the identification of alternative suppliers in times of emergency are key.
Supplier risk is an oft forgotten about risk as its typically out of sight and out of mind. Business owners often assume what was supplied yesterday will be available and provided tomorrow. It is imperative that business owners know not only who their critical suppliers are but ensure supplier due diligence and ongoing monitoring is undertaken to mitigate the risks of being in business with those suppliers.
Who are the key Management team, Customer feedback Reference ,Credit rating consultant review regarding management Team, ensure that owners and management are of good character and do not possess a criminal background or have a history of bankruptcy, Who are the key personnel in the company that will assist in the delivery of the contract?, Does the company have appropriate governance structures and business continuity plans in place?
Does the supplier have their own local price sensitivities for labour and materials? Are their production facilities state-of-the-art or requiring significant capital investment that may disrupt supply?
What currency will the goods or services be invoiced to you in? If not USD, then what are the financial consequences of not entering into foreign currency contracts to protect you from currency fluctuations?
How politically stable is the state or region they operate in and is there any upcoming legislation/ electioneering that may be adverse to the supply of the goods or service?
How will this be managed and monitored on an ongoing basis
Is supplier is maintaining all the necessary legal compliance.
NDA Non disclosure agreement /Confediality agrrement to protect your IP: We will review the supplier process & Procedure to understand that how supplier system are in placed to protect your intellectual property to strengthen this we will sign NDA with prospective supplier.
In order to have correct assessment / evaluation of Supplier it is essential to visit Suppliers’ factory / office. Our Strategic Consultant will visit Suppliers factory / office to have first hand assessment along with representatives from departments like Quality assurance / Inspection, Process planning, Design, Technical etc .