November 29, 2022 Ultimate News Hub

How to Assess Supplier Risk When Sourcing from China?

Today, the world is primarily connected to a vast network of supply chains. As a result, people can easily enjoy products from all over the globe. But the advent of COVID-19 has significantly disrupted this process.

Due to the pandemic, import and export manufacturing was forced to slow down. And now, after a year of the embargo, the world is experiencing strong demand for industrial products.

Thanks to China’s General Administration of Customs data, China’s exports jumped 60.6% in dollar terms in January-February as compared to the same time in 2020. This figure is much higher than the 40% estimated by Bloomberg economists.

However, these numbers are off on a low base due to the closure of factories and businesses in China in 2020 to control the coronavirus outbreak. Still, they reflect strong demand, especially for medical equipment and work-at-home devices. Now, all factories are opening slowly, and the demand for suppliers is also gaining momentum.

But, there are always risks when choosing suppliers, and sourcing from China is no exception. Fortunately, companies can take steps to review their suppliers and ensure they are using the lowest risk suppliers possible. Let’s look at several ways to assess the level of risk when selecting a particular supplier and to manage perfect quality control service.

Use of checklists

The procurement or quality department should use a checklist every time they select a supplier. Having a set of criteria that you can refer to will make the screening process run more smoothly. When creating a checklist, think of it as creating a process to follow every time you select a new supplier. Each criterion on the list must be met for the supplier to be considered low or zero risks.

Ideally, the quality department will work with the procurement team to create a checklist that the procurement team will use when considering a new source or supplier.

Conducting a risk assessment

Just as you can’t make it a life goal to “be great,” you may not be able to eliminate risk concerning suppliers, but you can minimize it. While even the best screening process cannot eliminate all risks, a supplier risk assessment can help you understand the risks involved in selecting a particular supplier from China.

What can a supplier risk assessment tell you? Essentially, an audit of a particular supplier’s technical capabilities, policies, and overall financial condition can provide insights into their business practices. Just as a landlord uses a credit report to screen potential tenants, a supplier risk assessment can give you some insight into the background of the supplier you want to use.

Conduct regular audits

Okay, so you use a checklist when you review a supplier, and, as a result of the risk assessment, you determine that the supplier is low risk and continue to use them. Does that mean the threat has been eliminated? No, it does not. Throughout the lifecycle of any relationship with a supplier, you must monitor performance against you.

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

What’s the next step?

Our team is committed to supplier quality, and if you are sourcing from China, our pre-shipment inspection services can guide you through every step thoroughly of the new supplier evaluation process. In addition, we have several services that would be useful to use during the supplier evaluation process.

Related Posts

How to Submit Your Podcast to Google Podcasts?

February 12, 2021

February 12, 2021

Do you know how reliable Google Podcasts are performing? Well, the growing number of podcast uploads on Google is proof...

5 Benefits Medical Billing Companies Offer To Urgent Care Centers

August 18, 2021

August 18, 2021

Urgent care centers have patients walk in to the clinics instead of seeking appointments, which is why such clinics do...

3 Essential Management Functions for your Business

June 14, 2021

June 14, 2021

To compete in a modern era, businesses need to be able to focus on their core functions above all else....

What is Social Media Marketing and Why Does it Matter for Businesses?

June 30, 2021

June 30, 2021

Today, social media and business go hand in hand. Given the indispensability, it will not be an exaggeration to say...

The Real Value of Impact Investing: Why It matters

February 8, 2021

February 8, 2021

Barely unknown ten years ago, Impact investing has risen to become a central theme in the investment world. Gone are...

Money-Saving Tips For Your International Move

February 13, 2021

February 13, 2021

International moving is a colossal life change. Once you decide to move to an entirely new county, your mind will...

Saudi Arabia Export Guide

March 9, 2021

March 9, 2021

Whether you are importing a new product or enabling an ongoing business to function, exporting to Saudi Arabia can be...

Tips for Creatively Going Green With Your Business

July 31, 2022

July 31, 2022

A significant number of businesses are going green, which is excellent news for the environment. For years environmental pollution has...

5 Things Every Business Should Take Seriously

June 3, 2022

June 3, 2022

If you are running a business, there is so much to think about. It can be a very stressful and...

7 Tips of SEO to Grow Local Business Sales Online in 2021

February 12, 2021

February 12, 2021

Whether your company is a large multinational corporation or a young start-up, search engine optimization plays a crucial role in...

Benefits of VOIP Conference Calls To Your Business in 2021

April 9, 2021

April 9, 2021

VoIP for Business has become a gadget in the market. Most companies use it to appreciate the many benefits they...

Business Phone App: Why Your Business Needs to Upgrade

December 17, 2021

December 17, 2021

As your business grows, it becomes necessary to upgrade your current hardware. Hardware is a very expensive part of running...

How to Choose the Right Business Location in NYC

January 11, 2022

January 11, 2022

Starting a business in NYC can be a fantastic idea – after all, the city is full of opportunities. However, one...

‘10’ Top Marketing Ideas for Salon Businesses!

February 8, 2021

February 8, 2021

So, you’ve designed a website, created a logo, or even purchased business cards, but is that enough? Well, flocking new...

Five must-have technology solutions to maximize your business’ efficiency

May 26, 2021

May 26, 2021

Technology is an integral part of a successful and efficiently run operational business. It can contribute massively to speeding up...

Comments
Leave a Reply