Risk Score Best Practices Summary

Below is a quick summary of best practices:

• It is essential to understand the origin of a risk scores in terms of its source data as well as the source supply chain level. For example, financial risk scores from Rapid Rating originates at a partner level and it then flows down to sites, parts, products, and categories. On the other hand, a natural disaster score can be from Resilinc, or Verisk Maplecroft and it originates based on supplier site location so it is a site level score which flows downwards to parts & categories. This is a key component of understanding risk score methodology better.
• Customize the weights and thresholds for your risk factors based on a company preference and SCRM objectives.
• Monitoring just a few risk score areas may not give an accurate picture about the overall supply chain risk. Create a holistic risk scorecard by including different risk score factors associating to all the supply chain elements and add a well-rounded approach to your risk program.
• Understand the types of data that contributes to risk scores. Ask your Custom Success Manager for ways to enhance or better the risk scores. For example, if a supplier is loaded in the portal without any sites there will not be any location risk score generated for that supplier due to lack of site data.
• Form a Risk Team, a group of people that can analyze the scores that come from Resilinc to see if certain partners or sites are worth implementing into their supply chain.

Enable a category managers team so they can better analyze risk score along with supplier’s performance KPI’s such as delivery times, product quality, and other logistical parameters. Integrating these factors with risk scores can initiate SCRM discussions with suppliers and encourage them to focus on reducing risk as one of the performance criteria.