“Risking It All” series launches next week with two great​ guests!

“Everybody talks about risk, but nobody does anything about it.”

Okay, so I took some liberties with the famous Mark Twain, and Charles Dudley Warner joke about the weather and made it about risk.

However, and different from the weather, procurement professionals can do something about risk, but for whatever reason choose not to. At least this is what one study reported when it was disclosed that while 80 percent of companies do background checks on their employees, just 20 percent screen their suppliers.

Joining me next week on Wednesday and Friday respectively is CreditRiskMonitor CEO, Jerry Flum, and The Hackett Group’s Chris Sawchuk to talk about risk and how we can bridge the gap between awareness and action.

Visit the PI Window On The World Show Page on Blog Talk Radio to check air dates for these first two in what will be a series of interviews on the topic of supply chain risk.

Should Suppliers Monitor Clients?

While everyone talks about the need to screen suppliers, I have not heard a great deal regarding the importance of suppliers “screening” their customers.

Back in 2004, my company was doing a healthy amount of business with what was at the time one of the largest PC integrators in the country.

Since the business was expanding into the United States, my CFO suggested that we use a company by the name of Euler Hermes to “insure” our new client receivables. In talking to him about it, I suggested that we may as well include our largest Canadian-based client in the program even though we had been dealing with them for the previous seven years.

You can imagine my surprise when Euler Hermes approved all of our new clients but declined to cover the receivables from our oldest client. They said that based on their assessment, the client would be out of business within 18-months.

As painful as it was, I immediately ceased doing business with the client and proceeded to collect the $250K they owed us.

Sure enough, within a year and a half, the client went bankrupt.

In a future segment of Risking It All, we will talk about the importance of client screening.

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