10 supplier risk signs to look for

In today’s challenging environment, companies need to be aware of the risks of suppliers going out of business. IndustryWeek lists ten signs to look out for:

• The supplier has a large part of its businesses in depressed industries
• It has raw material shortages or cannot meet the agreed lead times because of late purchase order placements
• It has heavily cut investments in R&D, IT, equipment or resources
• The quality of supply is deteriorating
• The supplier has entered into significant contracts with new customers
• Staff is being laid off
• Additional discounts are offered for early payment or require cash in advance
• The supplier is restating earnings and outlooks
• It has high-labour content that requires a large weekly payroll