supplier risk assessment-1There is always a level of risk when selecting a supplier to work with and that risk does not differ when sourcing from China. Fortunately, there are a few steps your organization can take to vet suppliers and make sure you are using suppliers with as low a risk as possible. Take a look at the different ways you can assess the risk level of selecting a particular supplier. 

Use a Checklist

If you are working in procurement or quality, use a checklist each and every time you select a supplier. Having criteria you can reference will make the vetting process easier. When you create your checklist, think of it as creating the process you need to do each time you pick a new supplier. The supplier would need to meet each criterion on the list to be identified as low or no risk. 

Ideally, your quality department will work hand in hand with your procurement team in creating the checklist and in making sure the checklist is used each time procurement is considering using a new source or vendor. 

Conduct A Risk Assessment

dont let customers find qc issues checklistLike you should never have a goal in life of being perfect, just excellent, you probably will never be able to eliminate risk completely, but you certainly can minimize risk when it comes to suppliers. Even the best vetting process cannot eliminate all risk, but if you perform a supplier risk assessment, you can get an idea of what the risk would be if you choose a particular supplier from China. 

What will a supplier risk assessment tell you? You are essentially going to audit a particular vendor's technical capabilities, policies, and overall financial health, which can give you insight into their business practices. Much like a landlord would use a credit report to vet a potential tenant, your supplier risk assessment can give you an idea of the history of a vendor you are looking to use.

Perform Regular Audits

dont let customers find qc issues auditOK, you used a checklist when vetting a vendor, then you did your risk assessment and declared the supplier to be low risk, so you went ahead and used them. Does that mean the risk is gone? It does not. Throughout the lifetime of your relationship with each vendor, you need to monitor their performance as it relates to your company. 

You need to regularly and routinely audit all of your suppliers to make sure you aren't bleeding money and using a vendor that is unfit for your organization. An audit will help you recognize patterns within the behavior of your vendors, and this is how you mitigate risk throughout the lifetime of your relationship with each supplier. 

What's Next?

Our team focuses on the quality of suppliers, and we can walk you through every step of the vetting process for new suppliers when sourcing from China. We have services that you might find to be beneficial to use during the supplier vetting process. Reach out and contact us today to schedule a free demo to see how we can help your organization!

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