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10 supplier risk signs to look for

March 23, 2009
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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
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