Company insight
Five key considerations to supplier risk evaluation
The Covid-19 pandemic exposed major vulnerabilities in global supply chains, causing uncertainty, shortages and long lead times. These events challenged supplier relationships, with status quo partnerships in question and under scrutiny. How do suppliers stack up? Qosina outlines five key areas for consideration and illustrates a risk evaluation model that can be used to assess supplier risk.
T
he supply interruptions and long lead times for critical process supplies during the pandemic prompted supply chain professionals to de-risk their supply chains. Dual sourcing is often cited as a risk management strategy, but in the regulated bioprocess and medical device industries, this approach may be difficult or impossible. In some cases, dual sourcing may not actually reduce the risk in the supply chain due to a common weak link for the first and second source. The strength of the supply chain cannot be a binary evaluation, with dual sourcing associated with strength and sole sourcing being weak. Each supplier has their own strengths and weaknesses, which impacts assurance of supply.
How should engineers and supply chain managers evaluate the assurance of supply programmes of their current or potential suppliers? The following article outlines five key areas for consideration and proposes the creation of a relative risk evaluation score based on each factor.
A risk evaluation during supplier selection allows a more robust supply chain to be built with fewer hidden risks.
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What industry(s) are the supplier’s products and services primarily sold in?
How long has the supplier served the regulated industries?
“Anyone can reduce the risk in their supply chains by first evaluating their own needs and then the key elements of their suppliers’ assurance of supply strategy. Then, supply chain professionals are able to focus their efforts on the highest risk items and suppliers in the supply chain.”
Industry specialisation and experience
Suppliers who specialise in industries with unique requirements are generally better suited to anticipate customers’ needs and have the competency to support their customers, asking questions such as:
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Is the supplier active in relevant trade organisations?
Does the supplier follow relevant best practices, guidance and regulations?
Does the supplier have deep subject matter expertise for their products and services?
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Does the supplier understand the challenges?
Business continuity
Suppliers who take business continuity seriously as a discipline are better prepared for unexpected events and, therefore, have systems in place to manage crises: ■
Does the supplier have a formal business continuity management system (BCMS) and ISO 22301 accreditation?
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Is the BCMS subject to third-party review and certification?
What techniques does the company use to assure its supply (for example, capacity planning, forecasts, inventories, and blanket orders)?
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Does the supplier have a formal supplier scorecard/supply chain management programme?
Medical Device Developments /
www.nsmedicaldevices.com
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