Which action demonstrates a robust supplier risk management approach?

Which action demonstrates a robust supplier risk management approach?

• A. Relying solely on price.
• B. Relying on a single supplier to reduce complexity.
• C. Identifying risk factors, assessing likelihood and impact, monitoring supplier performance, and developing mitigation plans including dual sourcing.
• D. Evaluating suppliers only during onboarding.

Answer: (C)

Robust supplier risk management is about a structured, ongoing process that builds resilience. It starts with identifying risk factors that could disrupt supply, then assessing both the likelihood and the potential impact to prioritize where to act. Continuously monitor supplier performance—delivery reliability, quality, compliance, and responsiveness—to catch early warning signs before problems escalate. Develop mitigation plans that include redundancy, such as dual sourcing, so there are backup options if one supplier falters. This combination of proactive risk identification, quantitative assessment, active monitoring, and contingency planning is what makes the approach strong. Focusing only on price, relying on a single supplier, or evaluating suppliers only at onboarding misses ongoing risk signals and fails to provide redundancy.

Robust supplier risk management is about a structured, ongoing process that builds resilience. It starts with identifying risk factors that could disrupt supply, then assessing both the likelihood and the potential impact to prioritize where to act. Continuously monitor supplier performance—delivery reliability, quality, compliance, and responsiveness—to catch early warning signs before problems escalate. Develop mitigation plans that include redundancy, such as dual sourcing, so there are backup options if one supplier falters. This combination of proactive risk identification, quantitative assessment, active monitoring, and contingency planning is what makes the approach strong. Focusing only on price, relying on a single supplier, or evaluating suppliers only at onboarding misses ongoing risk signals and fails to provide redundancy.