How can you measure and improve your supplier risk management maturity?

1 Define your risk criteria

The first step to measure and improve your supplier risk management maturity is to define your risk criteria, or the factors that you use to evaluate and classify your suppliers according to their level of risk exposure and impact. Your risk criteria should be aligned with your business objectives, industry standards, and stakeholder expectations, and should cover aspects such as financial stability, operational performance, quality, compliance, sustainability, innovation, and resilience. You should also establish a risk scoring system and a risk matrix to help you prioritize and categorize your suppliers based on your risk criteria.

2 Assess your current state

The next step is to assess your current state, or the level of maturity that you have achieved in your supplier risk management process. You can use a maturity model, such as the one developed by the Supply Chain Risk Leadership Council (SCRLC), to benchmark your current state against best practices and identify the gaps and opportunities for improvement. The SCRLC maturity model consists of five levels: ad hoc, reactive, proactive, collaborative, and resilient. Each level has specific characteristics, capabilities, and outcomes that you can use to evaluate your supplier risk management process.

3 Set your target state

The third step is to set your target state, or the level of maturity that you want to achieve in your supplier risk management process. Your target state should be realistic, achievable, and measurable, and should reflect your business strategy, vision, and goals. You should also consider the resources, capabilities, and technologies that you need to reach your target state, and the benefits and challenges that you expect to encounter along the way. You should communicate your target state to your internal and external stakeholders, and solicit their feedback and support.

4 Develop your action plan

The fourth step is to develop your action plan, or the set of actions that you need to take to close the gaps between your current state and your target state. Your action plan should be specific, detailed, and time-bound, and should assign roles and responsibilities to the relevant parties. Your action plan should also include metrics and indicators to monitor and measure your progress and performance, and to evaluate the effectiveness and impact of your actions. You should review and update your action plan regularly, and adjust it as needed based on the changing conditions and requirements.

5 Implement and improve

The final step is to implement and improve, or to execute your action plan and continuously improve your supplier risk management process. You should follow the plan-do-check-act (PDCA) cycle, which is a four-step method for quality improvement. You should plan your actions, do them, check the results, and act on the feedback. You should also involve your suppliers in the implementation and improvement process, and foster a culture of collaboration, trust, and learning. You should celebrate your achievements, and recognize and reward your best performers.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?