Do your new or current suppliers pose a risk to your business?
Sometimes the only way to find out if a supplier poses a risk is to perform some deep due diligence on them in order to assess their business health and if they’re able to be a stable, reliable supplier for the long-term.
Especially in these times where we’re dealing with a pandemic, getting a realistic picture of how suppliers are doing is hard without the ability to be on the ground in China. But there are actions you can take to check on if they could cause you problems in future, such as being shut down or being less able to produce products at the cost and quality you expect.
These due diligence activities are what we explore in this episode of the podcast and could be conducted either in-house (fluent Chinese is required) or by outsourcing to a company who is already in China with supply chain due diligence and management expertise.
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Renaud discusses the key points to focus on in due diligence, potential red flags, backup suppliers, and much much more in this episode.
Listen to the episode right here 👇👇👇
Here’s a summary of what’s in the episode:
✅ Why due diligence on suppliers in China so more important than ever right now due to the coronavirus pandemic.
✅ Does the inability to travel to China cause buyers to lack visibility into their suppliers?
✅ A list of the key due diligence points to focus on, in particular financials and respect for regulations.
✅ Why old-fashioned thinking of factory owners is short-termist and filled with risk for buyers and how this is changing.
✅ How business information may be more transparent soon in China.
✅ A list of the serious risks you are looking for when investigating suppliers
✅ If the worst should happen and you need to switch to a new supplier, how do you set up a backup supplier?
Where to learn even more about supplier due diligence?
Read these posts:
- What Makes Supplier Due Diligence & Compliance Harder
- China’s Corporate Social Credit System: Watch Out For Supplier Risk!
- Challenges in the due diligence process about suppliers in China
- Due Diligence and Business Intelligence in China
What kind of due diligence are you running on new or existing suppliers right now? Has being unable to visit China caused any issues? Have you found that more suppliers there are struggling in certain ways in 2020 than before?
Please share your thoughts in the comments.
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