Supply and Demand Chain Executive recently ran a great short interview with ADR North America's Bill Michels that highlights over a dozen areas (click to the second page for the list) to be on the watch for when it comes to supplier financial viability. Given the bankruptcy bloodbath that many turnaround firms are expecting for the North American auto supplier market, companies across manufacturing should think seriously about developing a targeted supplier financial viability warning system as part of their supply risk management efforts. Among the many areas that Michels suggests companies consider monitoring, a few are not as well known as you might expect. Consider how "consistently using your technical support, constant price increases, and negative variances from projections" are all signs of a potential financial failure (along with many other signals). All in all, I'd suggest that everyone who is worried about supply risk should hightail it to the second page of the article and print out the Michel's list to post on the wall. You won't be sorry (but you may be surprised).
- Jason Busch