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Risk management

Jörg Peier

The recent Corona pandemic has shown the importance of risk management. Misled by several decades of stable markets, some companies have forgotten to implement adequate risk management and safety mechanisms:

  • no safety stocks for anything 
    (despite the cost of capital / the interest rates being close to 0)
  • no binding long term supply-agreements committing both parties
  • fixed orders only to cover the next weeks
  • no long term logistic capacity planning and reservation
  • complex supply-chain and asia sourcing even for low value items
  • single source sourcing for too many production critical components

The results are devastating for many. Billions of revenues lost in Detroit, Wolfsburg, Amsterdam. Companies over-estimating their power in the supply-chain.
Single dollar value semiconductors leading to production shut downs affecting thousands of workers.

Proper risk management is highly complex, and some companies had only pro-forma processes which have not been worth the paper they have been written on. Interestingly, some fare much better than others. E.g. BMW has created with proper foresight a dedicated electronics sourcing team and is posed in 2021 for another record production year and will miss out at most on the production of 70-90.000 cars.

Making a thorough risk assessment is a great basis to build your risk management

  • What are your production risks, e.g. originating from the safety and quality procedures of your supplier?
  • What are your reputation risks, e.g. originating from the health, safety and environmental (HSE) behavior of your supplier?
  • What are your cyber risks and how can you mitigate them? A cyber-risk insurance is a great start, but what do you need on top?
  • What are your natural catastrophe risks (earthquake, hurricane, flooding, etc.)
  • What are your taxation and political risks, e.g. originating from the production locations of your supplier or its anti-corruption policies?
  • What are other risks specific to your business?

ebidtopay provides powerful out of the box risk management functionalities:

  • scoring and questionnaire functionalities for pre-qualification
  • pre-built templates to create a powerful risk management system
  • scoring and questionnaire functionalities for event based and continuous
    automatic supplier evaluation
  • easy risk specific color codes visible to every requestor and buyer on any supplier interaction
  • side by side comparison of self-declaration data (e.g. financial stability) with external data providers
  • detailed supplier approval status management by category, country and site
  • segmented supplier risk management, to e.g. have more detailed risk management on risk country suppliers or specific categories (e.g. direct materials)
  • conflict mineral management
  • diversity characteristics  of your supply base and your progress to a fair representation
  • supplier finance data tracking
  • certificate management and expiry reminder processes
  • automatic blocking of specific business transactions (order sending, new contract creation, RFQ involvement, etc.) in the case of a non-compliance event.
  • banking data management
  • managing of key agreements such as confidentiality, code of conduct,
    and master supply agreement
  • consolidation of risk data from several sources e.g. quality management, external data providers, audits, supplier-evaluation and self-declaration
  • emergency response actions
  • daily or weekly supply-chain health control surveys

On which supplier can you really rely in a crisis?


You can further improve your risk management by supplier enrichment services , based on separate licenses with our partner data providers:

  • assure correct supplier registration using our existing realtime web-services from BvD and Dun and Bradstreet 
  • benefit from pre-built interfaces to regularly enrich your supplier data chosing from the hundreds of data points per supplier offered e.g. by our partners BvD and Dun and Bradstreet
  • get systematic on sustainability connecting Ecovadis
  • get an additional edge in risk-management connecting Risk-Methods
  • benefit from large scale AI and machine learning using Tealbook as supplier foundation