Accountants and business advisors, Hurst, has launched a supplier assurance scheme to help companies evaluate the financial performance of companies in their supply chain and implement strategies to help guarantee their integrity.
The launch follows a supply chain assurance programme the company has
been running for JCB, the worldwide manufacturer of heavy construction and
agricultural equipment, for the last four years.
Helen Besant-Roberts, who heads up hurst’s supplier assurance programme says:
‘When evaluating the key performance indicators of vital supply chain
providers, companies look at their quality systems, manufacturing standards,
delivery guarantees and logistics capabilities. But rarely do they look at
their financial strength.
‘Yet it’s vital they find out what the risk is of financial failure. They
should also examine the challenges faced by the suppliers that could impact on
their financial performance. The company investigating its supply chain
providers should also determine whether their own pricing demands on the
provider, payment terms or other factors they impose could, in themselves,
contribute to the business failure of a supplier.’
At JCB, Hurst implemented a traffic lights scheme where the financial strength
of their supply chain providers are rated green, amber or red depending on
financial performance and risk. In addition the company holds regular workshops and
seminars for senior JCB management to ensure financial standing is a main key
performance indicator when assessing potential supply chain providers.