Next episode of our series: Supply Chain Risk Management done right: Supplier Risk Signals Most companies manage supply chain risk backward. They respond to events. THE MORE EFFECTIVE WAY: They should be reading signals. There is a world of difference between the two. An event is when your supplier calls to say they cannot deliver. A signal is the pattern that predicted the call weeks or months earlier. In my 18 years of building SCRM systems across industries, the same warning signs appear before almost every supplier failure: 🔴 Payment delays to their own sub-suppliers 🔴 Supplier asking for early payments 🔴 Unexplained and frequent management changes 🔴 Declining quality or rising non-conformance numbers without a clear root cause 🔴 Layoffs, high fluctuation, and strikes 🔴 Shipment and capacity excuses that keep shifting 🔴 Audit requests are being postponed again and again None of these alone is a crisis. Together, they are a pattern. Patterns are readable if you know what to look for. The problem is not that signals are invisible. It is that most organizations have never defined what a signal means for their specific supply base, and nobody is systematically looking for them. Technology might help with signal identification and pattern analysis, and so will educated, aware employees. Here is a simple starting point: Take your ten most critical suppliers. Do you have a defined set of early-warning indicators you actively monitor regularly? If not, that is exactly where your SCRM journey should begin. Next question you should ask: What signals have you seen precede a supplier failure? ————– Hi. I am Jan, your SCRM Builder. Not a consultant who theorizes about risk. A procurement leader & risk practitioner who has built 15 SCRM programs globally, trained 1,200 people, and led procurement and risk organizations through crisis. I share what works and help you build an effective SCRM. I work globally.
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