What is the main goal of Supplier Risk Management?

The main goal of Supplier Risk Management is ensuring a stable supply chain. This approach focuses on identifying, assessing, and mitigating risks associated with suppliers to maintain a consistent flow of goods and services. A stable supply chain is crucial for a business, as disruptions—such as supplier failures, financial instability, or geopolitical issues—can lead to delays, increased costs, and potential loss of customer trust. By proactively managing supplier risks, organizations can safeguard their operations, enhance reliability, and ultimately support business continuity. This encompasses assessing the financial health of suppliers, their ability to meet quality standards, and potential external risks that could impact their operations.

In contrast, while increasing market share or reducing operational costs may be outcomes influenced by effective risk management, they are not the primary focus. Minimizing supplier negotiations is also not a goal of Supplier Risk Management as effective negotiation can be essential in establishing strong relationships and terms that support risk mitigation.