When vetting potential suppliers and customers, it's vital to assess their risk-management profiles and strategies, says Danny Thompson, chief product officer at apexanalytix.

There are quite a number of risks that a company may face, but cyber risk is easily the most important one any company today must be ready to combat, Thompson says. While the majority of cyber-related supply chain disruptions is caused by attacks on suppliers, other major categories include financial risk and damage to a company’s reputation.

Monitoring the wide range of risks posed to and by an often-growing number of suppliers is becoming a major challenge for risk managers, Thompson says. “Just finding all of the data sources to assess risk, and then having the bandwidth to digest all of that risk data in order to take action, is pretty overwhelming for these groups.”

Siloed operations add to those managers’ headaches. “Often, they have a diverse group of siloed individuals in their organization, tapping a bunch of boutique siloed risk solutions,” Thompson says. “The risk information they have inside their organizations is spread around, and risk decisions are being made in siloed ways.”

Ideally, that risk information should be scalable, and manual risk assessment processes should be eliminated. “They need solutions that sense risk automatically and act automatically on their behalf, so they don't have to do this work manually.”

A risk assessment of every supplier is required, and at every stage. It’s not enough to assess risks posed by existing partners. “If managers perform a comprehensive risk assessment of a supplier in the discovery or prequalification phase or at on-boarding,” Thompson says, “then they have the opportunity to understand risks being brought into their environment by a given supplier, and maybe build remediation or corrective action into the contracts they establish with their new suppliers.”

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