Supplier risk is defined as the probability that a customer’s business activity will deteriorate, or even come to a halt, as a result of a malfunction in its relations with suppliers and service providers, or of undesired behavior on the part of one of them.
These malfunctions or inappropriate behaviors can be: a delay in production or delivery, bankruptcy or economic difficulties, or a breach of conduct in terms of CSR, entailing an image risk (subcontractors neglecting ethics, manufacturers using child labor or low-cost products produced on the other side of the world, etc.).
To prevent these risks, the company needs to take action. The first is to map these supplier risks.
