Check for financial health

12 October 2008
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13 October 2008 | Paul Snell

Buyers should check the financial health of their suppliers in the current economic climate, according to an academic.

Robert Handfield, Bank of America University distinguished professor of Supply Chain Management at North Carolina State University, told a session on global supply management: "This is a very serious issue and we need to be thinking as supply leaders about how we are going to prepare, because it is something that is going to impact our supply chains.

"Smaller suppliers that are relying on these credit markets don't have access to capital. Are there provisional measures that we can try and take, at least in the short term, for some of these impacted suppliers?"

He added supply problems affect company performance more than ever, with the value of shares falling by up to 20 per cent when a glitch is announced.

"There is ample evidence that Wall Street is very aware of what's happening in the supply chain. Analysts are now keenly aware of when there is a supply problem and are monitoring news feeds not only for a firm but also its supply base, if problems could impact on them."


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