Doug Schrock, partner, and Gregg Anderson, director, with accounting and consulting firm Crowe Horwath, offer the following four steps manufacturers should take to launch a supplier-viability initiative, with the goal of improving sustainability throughout the supply chain.
1. Identify the subset of suppliers that are most critical to the company, and then identify those that you need more important information about, whether it be basic financial-viability metrics or longer-term corporate responsibility indicators.
2. Develop a credible set of supplier financial-viability metrics that reflect your company's specific supplier risk profile.
3. Concurrently, develop a comparable set of corporate responsibility metrics.
4. Develop and implement a program for timely and accurate reporting of all key metrics, employing third-party intermediaries as necessary to encourage supplier compliance and openness.