Supplier Financial Risk

With today’s tight credit markets, supplier risk is a key challenge for Purchasing organizations.

We believe that conventional risk analysis does not have the ability to predict supplier failure, as it is:

•Not forward-looking (Information is at least three months old).

•Numbers driven, without the incorporation of qualitative/leading indicators.

•Focused solely on the supplier, without much attention to the market they are operating in.

•Practically useless for privately-held suppliers.

Supplier risk analysis should incorporate the following four key elements:

•Quantitative Financial Information

•Qualitative Insight

•Market Dynamics

•Financial Simulation (For private companies)