How much risk is there in your supply chain?

If you're a manufacturer, how do you assess the risk of key suppliers failing? This Financial Times article from November 2008 tells how a British defense group met with its top 100 suppliers and asked them, point blank, to notify it about any potential financial difficulties – and how a French aerospace and defense company created a "crisis cell" team to monitor its 4,000 suppliers.

A disruption to your supply chain – leading to delayed delivery, reduced product quality, or in a worst case, the entire disruption of sales – could reduce your incoming revenue as much as slowing demand would.

Given the severity of the potential impact of a failed supplier, do you have the right tools at your disposal to help assess risk? If you're a member of a dedicated supply chain analysis team at a larger organization – or a procurement analyst at a smaller organization who's been asked to assess risk – the following reports, available in the Information OnDemand store, might be appropriate for your toolbox.

• Media Sentiment Comparison
  Look for early signs of trouble at suppliers by gauging the sentiment expressed in news stories about them. With this report, you can measure the volume of media coverage and its tone – positive, negative, or neutral – about a company and a broader, related industry. News feeds are supplied by Newstin, a source that covers 150,000 news outlets in 20 languages, and allows you navigate back to the original content.
• Credit Score Highlights
  Keep tabs on which suppliers might be at risk of bankruptcy with this report, which uses up-to-date data from D&B. It shows credit score highlights for up to five companies and allows you to compare overall credit scores, which represent the ability for companies to pay their debt within the next 90 days.
• Company Lead Generator
  Identify alternative suppliers using this model, also based on D&B data – to proactively reduce risk, or to replace a supplier that already shows signs of disruption. Use zip codes and four-digit SIC industry codes to create a list of potential suppliers. Combine it with the report above to ensure that potential suppliers have healthy credit scores.
• Competitive Model
  Use this dashboard to compare the health of two suppliers you may be deciding between – by looking at growth rate, profitability, asset utilization, and liquidity. You can drill into any of these four dimensions and track up to 20 subcategories. The continuously updated data comes from Thomson Reuters and shows the trend for the last 16 quarters.

Because all of these reports are prebuilt, you save the time and hassle of having to collect and update data on a regular basis. If you choose to subscribe to the Information OnDemand service, you can also pay a flat per-user fee, which means that you're protected against increased costs if the amount of research you need to do increases dramatically.