Risk Scores Scope

Risk scores are indicative numeric values between 1-10 where 1 is considered as lowest risk & subsequent values up to 10 are considered higher risk. The risk scores can be associated with any risk factors that a company wants to bring in to the Resilinc environment to proactively track and assess. Some of the common risk indicators are location-based risk scores, (e.g., natural disaster risk, geopolitical risk etc.) financial risk of suppliers, Business Continuity Planning, and Corporate Social Responsibility. The source of the scores can be 3^rd party risk score providers such as Dun & Bradstreet, Rapid Ratings, EcoVadis etc. Customers can also bring in any custom values or their internal KPI’s to monitor supplier performance along with risk to create a score card in a centralized location.

The following is a use case scenario for this feature.

Understanding the financial stability, business continuity, operational risk, effectiveness of standard business processes etc. of suppliers can be a key to effective supply chain risk management. Risk scores can act as key performance indicators for procurement teams to qualify suppliers for long term business associations. With Resilinc, risk score category managers can create multiple risk factors, monitor them regularly, and make ongoing business decisions based on risk information at supplier, site, part, and product levels.

Once risk is identified with any of the supply chain elements, it allows category managers to take appropriate actions to register that risk and start taking mitigating actions. For example, a supplier with a high natural disaster risk score may have sites in regions which are prone to frequent natural disaster events. Having dependency on such suppliers or their sites can be a risk as the site may be impacted by an event resulting in supply shortages or disruptions. To avoid this risk, category managers can assess whether the risk is acceptable to the organization by reviewing the BCP plans for the supplier’s locations. Alternatively, the procurement team can qualify another supplier for their requirements and reduce the risk.

Customers can also encourage their suppliers to resolve potential risk areas which in turn helps organizations build more resilient supplier ecosystems.