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Third Party Credit Risk
Mitigating the risk of supply chain failure
Third Party Credit Risk is about protecting strongly performing businesses from under-performance in their supply chain. This is especially pertinent now as supply chains worldwide are more vulnerable than ever, in light of the recent outbreak of COVID-19.
A changing marketplace
The uncertainty impacting the current economic climate is likely to see the supply chains of major SA businesses more exposed by the impact of corporate failure.
The potential damage to revenues caused by the failure of a key customer is no doubt something you have considered. You can insure against the failure of a customer, but have you fully considered the implications of losing a key supplier? During this critical time, suppliers can often fail due to strains on working capital.
Mitigate the consequences
The insolvency of a supplier can bring costs from production stoppages or delays, stock outs, revenue loss and the cost of adjusting your own production cycles to different materials with no warning. It is vital to examine how you can monitor supply risk and implement strategies to mitigate the consequences.