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17 Examples of Supplier Risk

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Supplier risk is the potential for losses related to a supplier. This includes the risk that a supplier will fail to meet their commitments to you. Supplier risk also includes risks beyond the control of a supplier such as geopolitical risk that disrupts supply chains. The following are common supplier risks.

Supply Risk

The potential for a supplier to run out of supply.

Supplier Exit Risk

The risk that a supplier will go out of business or discontinue a business, product or service.

Supply Chain Risk

The risk of supply chain disruptions between you and the supplier.

Quality Risk

Quality failures on the part of the supplier.

Performance Risk

Low supplier performance.

Geopolitical Risk

Political instability that disrupts supply.

Regulatory Risk

The risk of new laws and regulations that disrupt the use of the supplier.

Ethical Risk

The risk that a supplier will do something unethical that becomes your extended responsibility.

Reputation Risk

The potential for a supplier to damage your reputation.

Compliance Risk

Compliance issues related to a supplier.

Cybersecurity Risk

Cybersecurity incidents related to a supplier.

Dependency Risk

Becoming overdependent on a supplier.

Intellectual Property Risk

Loss of intellectual property to a supplier.

Competitive Risk

The potential for a supplier to compete with you or help your competitors using their knowledge of your operations.

Price Risk

The potential for a supplier to increase their prices.

Barriers to Exit

The risk that you will find it difficult to discontinue use of a supplier even when you face problems with their performance.

Contract Risk

The risk that the supplier will not meet their contractual obligations.
In many cases, businesses choose to mitigate these risks by diversifying their suppliers. For example, a car manufacturer may contract two separate suppliers to deliver the same component.
Overview: Supplier Risk
The potential for losses due to failures of a supplier.
More Examples
A supplier of a specialized and difficult to source part goes bankrupt.
A new supplier delivers products late disrupting your supply chain and operations.
A supplier has quality issues that result in quality failures of your products.
Risk Treatments
Related Concepts
Next: Partner Risk
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