@Risk

Over the past few months, the topic of supplier risk in the automotive supply chain has been getting plenty of press –on this blog (here and here) and elsewhere, too (see Logistics Viewpoints,  and Industry Week for two recent examples). The attention is understandable. After all, auto manufacturers are now struggling with classic supply chain strategy problems, and I think we’re all intrigued (not to mention, invested) with the process of resolution as it unfolds.

But, in today’s economy, supplier risk management is emerging as a critical consideration not just for the likes of GM, but for virtually all businesses. For instance, this month’s issue of QSR Magazine has a great article that outlines supply chain challenges facing operators in the quick-serve restaurant industry.

Even though the National Restaurant Association’s Restaurant Performance Index has posted four consecutive months of gains, many quick-serve operators are experiencing supply chain disruptions due to the down performance of suppliers and/or supplier failure or acquisition.

To avoid being caught off-guard by a supply chain disruption, quick-serve executives interviewed in the article advise building strong, collaborative relationships with supply contacts at every level. As I’ve pointed out before, it’s particularly relevant to keep tabs on the financial standing of your suppliers. Start with third-party information sources (LexisNexis, Dun & Bradstreet, etc.), and then add in data based on your own independent research.

“You have to know the financial stability of the companies you are working with in order to work with them,” says Ashley Morris, chief executive officer of Capriotti’s Sandwich Shop. “We have an agreement with our suppliers that gives us the ability to look at their financial statements on a regular basis. A profitable company should be open to sharing this information with you.”

Other quick-serve operators suggest creating a contingency plan based on second (and third) source suppliers you can use as backup vendors. In addition, the article reports that many in the restaurant industry have discovered software solutions that help them organize supply chain information and better manage today’s ubiquitous supplier risk.