Key Supplier Risk Mitigation - Supplier Changes or wants to change Sub-Tier Suppliers

[Mike S.]

Let’s say you have a number of key suppliers who have been supplying products and services to you for awhile now – over a year. Their service, support, and product quality is acceptable at this time.

But you know the only constant is change, and you know Mr. Murphy has lots of relatives sniffing around at your suppliers’ establishments.

What kinds of supplier risk mitigation procedures do you employ for suppliers like these beyond the basics? I’m thinking along the lines of what kind of notice or control do you want if your supplier changes or wants to change sub-tier suppliers?

Thanks in advance!

 

[Sidney Vianna]

Re: Risk mitigation

What kinds of supplier risk mitigation procedures do you employ for suppliers like these beyond the basics?

Very likely controversy will erupt, but requiring your suppliers to be certified to an applicable QMS standard, such as AS9100 or ISO 9001 could be deemed as a risk mitigation approach.

 

[Mike S.]

Re: Risk mitigation

Very likely controversy will erupt, but requiring your suppliers to be certified to an applicable QMS standard, such as AS9100 or ISO 9001 could be deemed as a risk mitigation approach.

I agree Sidney -- but I consider that part of "the basics". I'm looking a little more cutting edge.

 

[Marcelo]

Re: Key Supplier Risk Mitigation - Supplier Changes or wants to change Sub-Tier Suppl

I think the main problem is - it really depends on what is supplied, so there´s no generic answer. You could require, for example, that your supplier perform a risk analysis of the process he uses for creating the product he supplies (or you can perform a risk analysis with him) and after identifying the major points of risk related to the particular product, requires that he actively monitors those and informs you of any possible finding which might impact the supplied product. You could also require that your supplier to he same for the sub-tiers.

 

[amit_rd]

Re: Key Supplier Risk Mitigation - Supplier Changes or wants to change Sub-Tier Suppl

First of all congrats for thinking beyond the basics - Highly appreciate that..


Now coming back to the question: Unfortunately so, the Quality Management Systems do not completely cover (due to different interpretaions) all associated risks for example: A very capable supplier with a degrading financial status, labor issues, safety concerns , "Compliance" concerns and as you mentioned sub supplier related issues and any of these may become a risk for the customer organization as well.

In my opinion a robust sustainability audit criteria should be established and promoted with the supply chain to address all possible risks. Its not an overnight job but is definitely an answer to work towards a risk free Supply chain.

 

[somashekar]

Re: Key Supplier Risk Mitigation - Supplier Changes or wants to change Sub-Tier Suppl

First of all congrats for thinking beyond the basics - Highly appreciate that..


Now coming back to the question: Unfortunately so, the Quality Management Systems do not completely cover (due to different interpretaions) all associated risks for example: A very capable supplier with a degrading financial status, labor issues, safety concerns , "Compliance" concerns and as you mentioned sub supplier related issues and any of these may become a risk for the customer organization as well.

In my opinion a robust sustainability audit criteria should be established and promoted with the supply chain to address all possible risks. Its not an overnight job but is definitely an answer to work towards a risk free Supply chain.

All this and more is "Supply chain visibility", the key to effective business process.