Identify supplier risks and ensure higher compliance

Determining supplier risk has become an increasingly important part of purchasing. We have known for a long time that gaining insight into purchasing risk on commodity level can be done by using the Kraljic analysis. In recent years the focus has shifted to monitoring risk at the supplier level in order to meet the expectations of regulators and other auditors. Within VendorLink we have brought together various smart functionalities under Risk Management to accommodate these needs.

Classify your suppliers to determine their influence

All suppliers support the services of your organization but how does this affect the service to your customers? In order to determine the risk of a particular supplier you must classify their service internally. By drawing up internal questionnaires you can determine the classification of the supplier in a uniform manner and record it in VendorLink. You can think about determining a classification based on the importance of availability, data integrity or data confidentiality.

Invite your suppliers to participate in a Risk Assessment

An internal classification of your supplier and their service is often not sufficient for regulators and auditors. In order to properly assess the risks that you run on supplier level as an organization, the supplier must also answer questions about internal processes and their measures to mitigate risks. We also call this a Risk Assessment. In VendorLink you can create different types of questionnaires based on the classifications and have your supplier answer them in the Supplier Portal.

Determine the "residual risk" per supplier and document mitigating actions

Based on the answers of your supplier you can properly assess whether it meets the expectations and requirements of your own organization. You can classify the various topics you ask questions about based on 'impact' and 'probability'. A combination of these two elements creates an automatically calculated "residual risk". A high residual risk means that, despite the answers given by the supplier, there is still an increased risk that something could go wrong. You can mitigate these residual risks by placing internal and external tasks on a VendorLink Planboard. These tasks are performed during the collaboration with the supplier. In this way residual risks are reduced to a minimum.

Work with workflows to safeguard internal processes

Within the Risk Management functionality of VendorLink we work with workflows to test the entered information. By using workflows, you ensure that the right people within the organization check the information entered before it is stored in the supplier file.

Measure and monitor the financial health of suppliers

Risk monitoring is not just about the supplier's internal risk classification. It is also about the financial health of a supplier. Monitoring such risks is best done by means of so-called financial ratios. These ratios reflect scores on relationships between financial data such as earnings, revenue and the balance sheet. In VendorLink you can enter this yourself or automatically import them by external credit rating agencies such as Annual Insight and Graydon.