Your e-mail inbox is likely getting swamped just now with offers to provide you with up-to-the-minute information on supply risk. I received one last week that pretty much promised all my supply risk issues would go away if I bought their list for $75. If only it were that easy…

The problem is, most of the information in these offers is based on historical financials and, as they say on the TV commercials, “past performance is no guarantee of future results”. Using only backward-looking historical information about supplier performance as your key metric for judging risk cannot provide you with a complete set of information on which to base some very important decisions about your supply base and risk exposure.

Instead, you need to develop a true 360-degree view of the supplier’s health by incorporating information from multiple sources:

• Financial (e.g. Z scores)
• Operational (on-time performance)
• Third-party (NGO sustainability ratings)
• Internal surveys (regional VP surveys)
• External surveys (supplier feedback)

Not surprisingly, this is an immense amount of information to find, collect, organize and present in a logical manner for decision-making. Doing so requires a robust technology platform, structured processes, and knowledge of how to set up and execute.

Developing this 360-degree view of your supply base will provide your organization with the best chance to Find, Fix and Follow-Through on the risks facing your supply chain.

Kris Colby is a Director in Ariba’s Spend Management Services group. Kris specializes in strategic sourcing and risk reduction with retail and CPG companies.