Supplier risk management (SRM) is an evolving discipline in operations management for manufacturers, retailers, financial services companies and government agencies where an organization is dependent on suppliers to achieve business objectives.
To overcome these challenges, companies mitigate supply chain interruptions and reduce risk with strategies and tactics that address supplier-centric risk at multiple stages in the relationship: In 2008–2009, manufacturers experienced the startling speed at which suppliers can move from stability to shutting down operations.
The devastating impact of a crucial supplier failure has moved risk management from add-on service to mission-critical.
For example, a financially stable supplier may in fact be about to lose it CEO to retirement – which may cause issues within the management team.
Early visibility into that change gives the manufacturer time to ensure it does not affect customers negatively.