Do you know the risk quotient of your active suppliers? 

Traditional SRM solutions do not integrate common indicators associated with risk; yet, supplier-related risks exist at every point in your supply chain. Begin to think SRRM—Supplier Risk and Relationship Management.  Beyond the traditional financial, quality, and performance indicators, there are other critical risks that should be actively monitored. These can include brand and regulation risks, fraud, natural disaster, and political and country risks.

Break risks into 6 key dimensions: 
1) Macro- external to your supplier, include geo-political and environmental risk.
2) Fraud- intentional and unintentional supplier fraud like double billing.
3) Category- items like rising commodity prices that affect all suppliers in a category.
4) Supplier risk- a broad category including financial performance risks.
5) Product risks- quality risks including manufacturing constraints.
6) Internal risks- risks within your source-to-settle process including kickbacks, bribes and fraudulent payments.

Build a strong supplier program and proactively talk to your suppliers about these risks.  Although these may be tough conversations, if you diligently guard against the occurrence of these risks can protect the company and reinforce procurement’s status as a true leader within your organization.