Developing a Supplier Risk Identification Tool for a Technology Company

Abstract

This thesis studies supplier risk identification and evaluation in the case company context. The case company is a rapidly growing new organization that does not have all its process-es defined on a detailed level. Structured ways of identifying, evaluating and documenting supplier risks in procurement are missing and consequences can be catastrophic. Revenue might be lost through delayed customer deliveries or the reputation of the company can be ruined for good.

The current state of the case company supplier risk identification is studied by making observations, reading internal documents and conducting interviews to understand the strengths and weaknesses of current operations. Existing knowledge from e.g. handbooks, journal articles and whitepapers is explored based on the identified strengths and weaknesses. The findings from the Current State Analysis and existing knowledge are used to create a Conceptual Framework and the proposal is then co-created with the case company employees by presenting the findings of the earlier phases to them. The final proposal is validated with the case company key stakeholder.

To raise the case company risk management to the next level this thesis develops a simple, easy-to-use Excel-tool to be used by the sourcing department for supplier risk identification, evaluation and documentation. The outcome of the thesis is a risk identification tool the case company employees can customize to fit their needs. Employees, who are experts of their respective fields, can determine the risks belonging to each predefined risk category and weigh these risks based on how relevant they are for the case company. This way the tool helps the case company sourcing find the correct issues to focus their attention to when suppliers need to be engaged with.