Supply Chain Trading Partner Risk Assessments

March 2, 2011 - PRLog -- A second financial crisis in a decade has demonstrated that even the most trusted supply chain trading partners can experience internal control and compliance failures that lead to undetected changes in processes and materials.

Supply chain disruptions can reduce your company’s revenue, cut into your market share, inflate your costs, send you over budget, and threaten production and distributions.  You can’t sell goods you can’t manufacture or deliver.  Such disruptions can also damage your credibility with investors and other stakeholders, thereby driving up your cost of capital.

Lean manufacturing, just-in-time inventory and competitive pricing pressures can have unintended consequences.  Without realizing it, your company’s best intentions to become a fierce competitor can leave your company vulnerable.  External risk assessments of supply chain trading partners is an essential part of proactively managing all supplier-related activities, and monitoring supplier performance.

From an operational perspective, complex networks of suppliers, customers and third party service providers as well as large interdependencies among multiple firms exist, making inter and intra-organizational coordination of risks a critical requirement.

zEthics (http://www.zethics.com) introduces a universal supplier metric based on external risk assessments of supply chain trading partners to help global suppliers proactively manage supplier-related activities.  These metrics can be used to benchmark supply chain trading partners to readily identify risks that can lead to supply chain disruptions, reduce revenue, cut into market share, inflate costs, and threaten production and distributions.

A straightforward approach for viewing supply chain risk management focuses on two fundamental aspects of a potentially disruptive event: 1) probability (likelihood) of the event actually occurring; and, 2) impact (consequence) of the event on the supply chain, and subsequently the overall business.

Culture benchmarks based on external risk assessments of supply chain trading partners compliment mitigation mapping, supply base profiling and simulation techniques to provide early warning of an increased likelihood of potentially disruptive events.  These culture benchmarks are a primary differentiator, providing supply chain managers the flexibility to use predictive analytics to better prepare for risks that can lead to supply chain disruptions.

If your business is important enough to a supplier, they are willing to provide you risk intelligence of their operations at no cost to your company.  zEthics external risk assessments can give supply chain managers an insider’s look at financial, operational and strategic risks for every trading partner within your supply chain.  

These external risk assessments can be integrated into your Enterprise Risk Management (ERM) and Governance, Risk & Compliance (GRC) applications to give your leadership team a holistic view of risk.

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zEthics is a start up based in Phoenix, Arizona that takes a holistic view of risk, integrating External Risk Assessments with Enterprise Risk Management (ERM) systems. zEthics introduces the first cloud computing application for Enterprise and External Risk Management (EERM), providing Corporations, Investment Companies as well as Federal and State agencies a holistic view of risk. zEthics provides the diagnostic tools to align risk and performance to create a risk intelligent organization.