Managing credit risk in the supply chain - by David CONAWAY

Companies expend substantial resources managing the credit risk of customers, to protect the value of their sales. Many companies, however, do not always apply credit risk analysis to their supply chain, focusing instead on procurement at the lowest cost and compliance with a myriad of regulatory issues. However, credit risk in the supply chain may actually pose a greater potential risk of loss. If a supplier fails to deliver the product on time, the manufacturing process can be interrupted or halted, potentially idling plants at a significant daily cost to the company.