How to Spy on Your Suppliers (Part 2)

In the first part of this post, I highlighted some of Brian Sommer's suggestions for leveraging the Internet to gain supply risk intelligence about your suppliers. What are some of Brian's preferred tools for gaining insight into companies? During his talk at Corporate United Synergy he suggested: Google, financial filings (e.g., SEC, EDGAR, annual reports), LinkedIn, job boards, online resumes, lawyers (who can pull restricted online filings that non-attorneys do not have access to), country clerks and other similar sources can all be useful. In addition, other sources Brian recommends include company speeches and presentations (try restricting Google to .PDF or .PPT searches), divorce proceedings, antitrust cases, broader social network, patent applications, out of print trade magazines, internetarchive.org (which keeps a store of how websites once looked), D&B, Vykor, trade shows, Scribd.com and Slideshare.com.

All of these sources of information can help companies discover new information about their suppliers. Granted, they're most useful once "you've developed a particular hypothesis about a supplier" and are using them to validate what you suspect. For example, a hypothesis you might want to validate may fall into the following list: "a supplier has lost key personnel, a supplier is actually sub-contracting work, a supplier's gross margin is higher than it claims (or your firm's), a supplier is cash constrained and can't offer great credit terms, etc." But there are more creative and broader uses for the type of information that social networking, targeted Google search strings and other types of directed queries can provide when it comes to suppliers.

Brian suggests that you can also use these approaches to assess a supplier's -- or a competitor's -- dependency on such things as: a single partner (i.e., sole source), a single country or region, overlap between supply bases and overall competitor vulnerabilities. Granted, in certain cases digging or information hunting may only lead you down a path, but it can then provide you with the justification to look further in a specific direction.

For example, I know one firm that recently hired a private investigator to look at the sourcing and outsourced production practices of a competitor. If the private investigator finds what they suspect he will -- based on their own research and hypotheses -- they plan to show the restricted and illegal use of certain chemicals in an offshore operation with products ultimately destined for a country that bans their use. This will then allow them to take business away from the organization in question by directly confronting their customers about the competitive suppliers' offshore business practices (not to mention potentially serving as a launch pad for a government investigation).

Jason Busch

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