The Best Ways To Assess Supplier Risk While Sourcing Product From China

When choosing a supplier outside your native country, there is always a risk associated with this, and product sourcing from China is no different. Fortunately, there are steps that organizations can take to review their suppliers and ensure that they are using the lowest risk suppliers possible. Let’s have a quick look at the different ways to assess the level of risk involved in selecting a particular supplier.

Use a checklist

The procurement or quality department of any company can use a checklist every time they select a supplier. If you have a set of criteria to refer to, the screening process will go more smoothly. When creating a checklist, think of it as creating a process that should be followed each time a new supplier is selected. Each criterion on the list must be met for the vendor to be considered low or no risk. If your inhouse team is unable to do this task, A good inspection company in China can help you perfectly. They have a team of skilled professionals who have years of domain expertise in offering such services with acute preciseness. These companies can also help you save time and cost.

Ideally, the quality department should work with the procurement team to create a checklist, and the procurement team should use the list whenever they consider a new source or supplier.

Conduct a risk assessment

Just as you should never set “excellence” as a goal in life, you may not be able to eliminate risk when it comes to suppliers, but you can minimize it. Even the best screening process cannot eliminate all risks. Still, by conducting a supplier risk assessment, you can understand the chances of selecting a particular supplier from China.

What does a supplier risk assessment tell you? Essentially, an audit of a particular supplier’s technical capabilities, policies, and overall financial situation will give you insight into their business practices. Just as landlords use credit reports to vet potential tenants, a vendor risk assessment can give you a history of the vendors you want to use.

Conduct regular audits

Okay, so you use a checklist when considering a vendor, and as a result of the risk assessment, you determine that the vendor is low-risk, and you continue to use them. Does this mean that the risk has been eliminated? No, it does not. Throughout your relationship with each supplier, you need to monitor their performance as it relates to you.

All suppliers should be audited regularly to ensure that you are not drifting or using suppliers that do not fit your organization. By recognizing patterns of supplier behavior through audits, you can reduce the risk in your relationship with each supplier.

What’s the next step?

Being a leading company, our team is committed to delivering high-quality factory audit services. In addition, if you are sourcing from China, we will guide you through each step of the new supplier review process. We have several services that can be beneficial to use during the supplier review process. You can contact us to schedule a free demo at your convenience.