In the first two posts in this series (click here for Part 1 and Part 2), I covered the history and context behind D&B's Supplier Risk Management toolset. This solution set includes supply risk content, predictive analytics and an underlying technology platform for monitoring the supplier lifecycle. In this post, I'll provide details on the specific solution elements, and in a final installment of this series I'll offer a peek into the data elements and categories D&B uses in predictive forecasting around supply risk. Let's begin by covering the basics of D&B's supply risk solution platform today.
D&B's Supplier Risk Manager solution, which combines past elements of the Open Ratings solution with broader supplier management lifecycle capabilities, enables risk management across four broad process areas: certification, monitoring, analysis and mitigation. D&B Supplier Risk Manager further offers a set of seven modules that map to the four Supplier Lifecycle Risk Management process areas including: supplier locator / identification, certification, alerting, score-carding, supply base analysis, surveys and assessments. The toolset, while focused primarily on risk, has material overlap with supplier information management tools from AECSoft, Aravo, Ariba, CVM Solutions, Emptoris, and others. However, the predictive risk scoring and alerting within D&B Supplier Risk Manager appears to be fairly unique.
The Supplier Risk Manager Alerts module -- which falls under the "monitoring" phase of the supplier lifecycle -- provides real-time alerting based on changes in a variety of underlying data elements. User customization allows companies to "set thresholds on over 25 data elements," including D&B's Supplier Stability Indicator (SSI), designed to predict near-term "90-120 day financial and operational stability" in suppliers, as well as their Supplier Evaluation Risk (SER) rating that "predicts the likelihood that a company will obtain legal relief from creditors or cease operations without paying creditors in full over the next 12 months." Other configurable alerts include special claims indicators (e.g., operations, liens and claims, natural disasters), EPA, OFAC and debarment indicators/OSHA incidents, supplier performance benchmarks and deviations and government control lists. In addition, the Alerting components enable companies to look at their portfolio of risk distribution based on all monitored suppliers identified by the company, showing "the risk distribution of all the suppliers on [a] watch-list compared to the benchmark."
Outside of the alerting component, D&B provides additional core functionality, which begins to show increasing overlap with other companies (including D&B channels/competitors in the procurement and supplier information management arena, such as Ariba). For example, D&B's Supplier Risk Manager Certification module provides a scalable means to certify and onboard suppliers in a manner that is closer to industry leaders like Aravo than to what original supplier portals looked like years ago. Specifically, the Certification component lets companies collect information from suppliers in a self-service, manage-by-exception manner. It also lets users customize questionnaires and the requested information from the suppliers, as well as upload documents (e.g., around supplier diversity, insurance certification, quality certification / metrics, etc.). Other capabilities tied to Certification (or ongoing supplier development process) include an Assessments Module that lets companies gather information, for example, on supplier lean manufacturing processes, and then conduct, in D&B's words, "a gap analysis methodology that compares the supplier against industry best practices."
D&B's Supplier Risk Manager Supply Base Analysis module provides added capability to analyze different risk factors across and within the supply base -- and to take mitigating steps as a result. The Supply Base Analysis module provides specific views such as risk, diversity, file analysis and corporate hierarchy. It can help companies answer questions such as: what am I buying, and what activity is taking place within a BU? Trending features help track supplier risk and spend over time and can pinpoint specific areas of focus.
Companies wishing to dive deeper into historical analysis and those that require additional sophisticated analysis should evaluate SAP Spend Performance Management; this solution enables true part / line-item level analysis tied to a variety of risk elements (e.g., inventory information, historic performance, supplier financial viability, etc.). The D&B solution does not go this far. Yet, as an extension of the alerting and supplier management capabilities of the rest of the suite, D&B's Supplier Risk Manager Supply Base Analysis module compares favorably to other capabilities in the market outside of SAP, many of which also lack line-item level visibility tied to various risk elements for query and analysis.
Overall, D&B Supplier Risk Manager provides one of the more flexible and robust supply risk management solutions in the market when it comes to monitoring supplier financial and operational risk. While not a killer application in the broader supplier information management sector, nor a replacement for other spend analysis and analytical tools, for companies looking to gain a handle on supply risk, it should appear on the shortlist of solutions. And for some, it may suffice from a broader capability standpoint as well. Moreover, based on D&B's agnostic approach that lets companies decide whether or not they want a buyer-funded or supplier-funded model for supply risk management and supplier monitoring, it should provide a level of flexibility that focused, software-only solutions in the sector often fail to achieve.