A supplier risk assessment is a structured review of the likelihood and potential impact of supplier-related events on the organization. Scope may include financial, operational, geographic, quality, security, privacy, legal, compliance, safety, sustainability, and concentration factors. Scores should be traceable to evidence, thresholds, ownership, review dates, and actions rather than treated as permanent facts.
In plain English
It evaluates what could go wrong with a supplier relationship and what response is appropriate.
Illustrative example
At Northstar Industrial Systems, a critical component supplier receives evidence-based financial, capacity, geographic, and continuity ratings that trigger a mitigation plan and quarterly review.
- Related terms
- Due diligence; Supplier scorecard; Critical supplier; Supplier segmentation
- Lifecycle stages
- Source; Approve; Govern; Optimize
- Stakeholders
- Procurement; Operations; Finance; IT and Security; Compliance and Legal