Imagine this: One of your key suppliers suddenly declares bankruptcy.
You can no longer get the parts you need to keep manufacturing your product. What are you going to do? Your customers are going to be angry. Your new product launch will have to be indefinitely postponed. Your leadership will be furious. Your stock price will start to plummet.
This is a big deal.
Except—this is not a big deal.
Because you're already managing supplier risk.
You’re alerted to the financial insolvency, you take steps to find alternative suppliers and you keep your supply chain intact. That’s what supplier risk management is all about: identifying, assessing and mitigating threats to your organization’s business operations that are caused by the actions of a supplier.
If you’ve got a traditional supplier risk management solution, you probably think you’re in great shape. You’ve built the risk profiles of your suppliers into your selection process. You’re staying on top of any major changes to their risk profiles. And you’re taking action when you’re told to.