As those British supermarkets involved in the horse meat scandal will testify, poor control of suppliers can damage your reputation and cost time and money.
Here's eight tell-tale signs that you might need to reign-in and review your supply chain compliance systems and processes.
1. There's an audible groan when a management report is required at short notice. You feel like you are 'drowning' in data that's held in various places - largely spreadsheets that don't quite integrate with your other back office systems - and which you can't use collaboratively. Turning this information into the management reports your board wants involves many hours of work and manual processing.
2. Your field of vision on your supply chain is a tad blurry. Answer these questions honestly: How good is my supply chain visibility, are there any blind-spots? Can I map data both currently and historically to plot trends and spot weaknesses? If you are satisfied with your own contractors, what about their sub-contractors - do I have them in my sights?
3. You swear when you receive your new insurance quote. Your insurance costs are heading skywards rather than down because your insurer isn't convinced your supply chain risk is under full control and that your premiums should fall.
4. Your team are busy 'doing' rather than 'developing'. Do those supply chain development tasks keep getting deferred because your team is stretched and is largely reactive? Are your best people bogged down in managing a clunky supply chain compliance process and frustrated they're not doing the creative supply chain development work that was in their job description?
5. There's a nagging worry about how you would defend yourself in court. Do you ever get anxious, or have a bad dream about legal action if things go wrong? How easy would it be to defend your actions? How easily could you retrieve a full compliance information audit trail and satisfy a judge with robust evidence?
6. You cross your fingers your suppliers maintain compliance in between assessments. If your assessment system measures compliance once a year, how do you ensure that you've got things covered for the other 364 days? What strategies do you have in place to avoid those compliance lapses that could come back and bite you? And what happens when there's new legislation, or your business needs change? How do you manage the necessary compliance updates in between annual assessment periods?
7. You could have done the job yourself in the time it takes to appoint and assess a new supplier. If it takes months and weeks, rather than days, to assess and appoint a new supplier this is a clear sign that your risk assessment and supplier information management processes are ready for an overhaul.
8. The supplier you want to work with runs for the hills when you mention the words assessment, assurance and risk management. If this is the case, it could be you are asking suppliers to jump though unnecessary hoops and assessing them on criteria that have no relevance to the work they will undertake for you. And do you make them jump through the same dreaded hoops each and every year, rather than just updating their existing evidence?
☛ Len Simmons is technical director at Altius Vendor Assessment