Blog / Article

What Works & What Doesn’t in Supplier Risk

The past three years have presented unparalleled challenges, with events like Brexit, the global pandemic, and geopolitical shifts profoundly impacting businesses worldwide, particularly in the UK. This era of continuous disruption has highlighted an undeniable truth: the necessity for robust supplier risk management is more critical than ever. As market signals remain uncertain and economic pressures persist, understanding and mitigating potential vulnerabilities within your supply chain is no longer a luxury but a fundamental requirement for sustained success.

It’s tempting to view comprehensive risk assessment as an insurmountable task amidst such volatility. How can one accurately predict the future in a landscape defined by rapid, unforeseen changes? While this sentiment is understandable, it overlooks the proactive power of effective strategies. Instead of succumbing to uncertainty, organisations must embrace innovative approaches to supplier risk management that build supply chain resilience, enabling them to navigate unexpected events with greater confidence and foresight.

Understanding Business Restructuring and Insolvency

Evolving Approaches to Proactive Supplier Risk Management

Traditional methods of financial health assessment, while foundational, often present an incomplete picture when it comes to the complex world of supply chains. A standard credit check, for instance, focuses predominantly on a company’s immediate financial standing and direct customer base. This approach, while useful for flagging obvious issues, frequently misses critical weaknesses that lie deeper within the extended supply ecosystem.

The key to effective supplier risk management lies in adopting a holistic perspective. It’s not enough to assess your direct suppliers; their suppliers, and even their customers, can introduce significant risk. To truly gauge a company’s level of exposure and ensure the security of your investments, a thorough vendor risk assessment must extend across the entire third-party network.

This comprehensive third-party risk management approach ensures no stone is left unturned, safeguarding your operations from hidden vulnerabilities.

Unlocking Deeper Insights for Enhanced Supplier Due Diligence

The challenge in conducting thorough supplier due diligence often isn’t a scarcity of information, but rather its accessibility and usability. Vital data, such as detailed company reports, is readily available through official sources like Companies House. However, traditionally, this information has been locked away in thousands of disparate PDFs, demanding laborious manual sifting—a monumental task for individual companies, let alone an entire supply chain.

Recognising this pervasive obstacle to effective procurement risk analysis, we developed SearCHeD. This intuitive tool transforms vast quantities of Companies House data into easily searchable documents, dramatically streamlining your information gathering process. Imagine instantly finding every document related to a specific company, or using keyword searches to uncover signs of distress across your entire vendor portfolio. SearCHeD empowers businesses to conduct superior vendor compliance checks and gain rapid insights into potential risks.

Beyond individual company analysis, SearCHeD facilitates the identification of emerging risk patterns across your industry. You can search for specific keywords across the entire database, revealing broader trends that might impact your supply chain. Furthermore, the ability to generate detailed reports in various formats—PDF, Excel, or CSV—at the click of a button simplifies data sharing and strategic planning.

Forecasting the Future: Empowering Supply Chain Resilience

With a comprehensive understanding of a company’s current status, the next critical step in supplier risk management is to accurately forecast future scenarios. This is where advanced analytical capabilities truly elevate our service, providing invaluable foresight for supply chain resilience:

Simulate & Analyse:

Our interactive dashboard allows you to simulate a broad spectrum of financial risk scenarios. From margin squeezes to customer insolvency, you can instantly visualise the potential impact on a company’s H-Score®. Comparing this against industry benchmarks provides crucial context, illustrating how well a particular vendor might withstand various economic pressures.

Customised Projections:

The Custom Forecast View enables you to tailor these models precisely to your needs. By adjusting various financial parameters using simple sliders, you can create bespoke financial risk forecasts that reflect your specific concerns and market assumptions.

Deep Dive with Experimentation:

For those requiring an even deeper level of analysis, our Experiment feature allows you to integrate your own figures and insights. Incorporating actual numbers from company reports or internal projections enables the creation of highly accurate and nuanced risk profiles, moving beyond educated guesses to truly informed strategic decisions.

While no prediction is ever flawless, the difference between an informed projection and a shot in the dark is profound. We put unparalleled company data and analytical tools at your fingertips, enabling you to proactively identify and mitigate risks that others might overlook. Arrange a free trial today, and discover how Company Watch can empower your organisation to achieve exemplary supplier risk management and build a truly resilient supply chain.

craig-evans-headshot
Craig Evans
CEO
It’s the people and clients that make our business, and at Company Watch we are fortunate to have both exceptionally talented people and an extensive set of loyal clients. I feel very privileged to lead the company and partner with our customers in this next exciting chapter.