Today, there is a growing need for transparency in all areas of the supply chain. Businesses are evaluating their risk in a variety of areas including finance, labor, and sustainability. An issue with evaluating risk is the lack of clarity of what to assess and how to accurately measure risk. A recent study indicated the top 3 challenges associated with a supply chain risk assessment are as follows:
1. Lack of good data on vendors
2. Poor visibility into the use of subcontractors
3. mitations in the ability to compare risk vendors
While trying to find ways to get beyond these issues with assessing risk, businesses also must look at the sustainability of their supply chain. Evaluating sustainability is more than just indicating you are “going green” but it’s a matter of being sustainable at economic, financial, social, and environmental levels. This includes looking at your supplier base and being proactive about the relationship instead of reacting when there is a supplier failure. Industry Week provides some steps you can take in the short term to help you evaluate and ensure supplier viability. The steps include evaluating your supplier base (critical and non-critical) based on financial and corporate responsibility metrics, and then developing and implementing a program to accurately report the metrics. Following these steps will create transparency in your supply chain and mitigate risk.
1. Lack of good data on vendors
2. Poor visibility into the use of subcontractors
3. mitations in the ability to compare risk vendors
While trying to find ways to get beyond these issues with assessing risk, businesses also must look at the sustainability of their supply chain. Evaluating sustainability is more than just indicating you are “going green” but it’s a matter of being sustainable at economic, financial, social, and environmental levels. This includes looking at your supplier base and being proactive about the relationship instead of reacting when there is a supplier failure. Industry Week provides some steps you can take in the short term to help you evaluate and ensure supplier viability. The steps include evaluating your supplier base (critical and non-critical) based on financial and corporate responsibility metrics, and then developing and implementing a program to accurately report the metrics. Following these steps will create transparency in your supply chain and mitigate risk.
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