Have you identified and assessed all the risks in your supply chain? Knowing the key areas to evaluate for each of your suppliers can make this an easier and less time-consuming process. Below are the five key areas to cover when assessing the risk factors in your supply chain.
Editors: You are welcome to use this tip sheet as long as the contact information at the
bottom is included.
Top 5 Areas to Cover When Assessing Supply Chain Risk Factors
Have you identified and assessed all the risks in your supply chain? Knowing the key
areas to evaluate for each of your suppliers can make this an easier and less time-
consuming process. Below are the five key areas to cover when assessing the risk
factors in your supply chain.
1. Country of Origin ? Knowing the location of your supplier?s production facilities is
important in recognizing their susceptibility to security threats. Countries which are
more vulnerable to threats could affect the security of the supplier?s plants and could
cause delays in your supply chain or compromise the products you receive. A key
question to have answered is the physical location of each of the supplier?s plants
and/or factories, and if possible, the locations of their raw material suppliers.
2. Shipment & Delivery Accuracy ? Ensuring that a supplier can deliver supplies
consistently and on-time is key to assessing the risk they pose to your supply chain.
Be sure to ask for shipment times (daily, weekly, etc.), mode of transportation (air,
land or sea), and procedures re-routing when natural disasters interrupt trade lanes.
3. Physical Security ? Assessing the physical security is very important, especially in
countries where terrorism is on the rise. Inquiring about areas such the materials
used to construct the building, existence of a guard gate, adequate lighting around
the perimeter, use of locks on all windows and doors, perimeter fencing, and cargo
storage procedures will help you assess the ability of the supplier to keep their
location secure regardless of natural or institutional threats.
4. Internal Processes ?Soliciting information about a supplier?s internal processes
provides visibility into not only the security, but also the controls put in place during
the manufacturing process. Suppliers should be asked to explain processes dealing
with how keys are checked out, visitors are monitored while on-site, access to cargo
is restricted, use of computers and electronic data is controlled, and employee
background checks are conducted.
5. Social & Environmental Responsibilities ? Requesting information on the
removal of chemicals used during the manufacturing process, or if the supplier
abides by the no child labor law are only two of the important questions in this area.
It is also instructive to inquire about internal policies such as maternity leave and
paid-time off as well as the air quality and work environment. Supplier social and
environmental responsibilities are becoming a larger factor in assessing risk in a
supply chain as product safety regulations continue to be proposed and passed into
Tips provided by Karen Lobdell, Director of Global Solutions at Integration Point. Contact
Karen Lobdell and Integration Point at Info@IntegrationPoint.com or 704-576-3678.