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China Sourcing Solutions Risk Management Plan

Thirty-two per cent of companies listed on the S&P 500 index is affected by risk. The main culprits are natural disasters, including floods, typhoons, factory fires, and explosions. Besides, some political factors will have an impact on global economic, social, technological and environmental trends at the macro level, and the most important thing is the stability of the global supply chain.


China sourcing solutions should take proactive measures to deal with risks. Of course, it is not enough to focus only on potential risk areas. If procurement risks will directly affect enterprises (or their suppliers and customers), China sourcing solutions must also do its best to avoid or mitigate risks.


With the increasing globalization of supply chains, the ability to manage related risks across regions and time zones is rapidly becoming the primary task of global organizations. The establishment of a procurement-centric risk management plan enables a more careful assessment of primary, secondary and tertiary suppliers and their respective operations, such as:


How long have we been trading with this supplier?


So far, how have they performed in terms of product and service quality and delivery on time?


How many contracts have we signed with our suppliers?


Given the changing market conditions, is the previously signed terms still optimal?



Do we have any large purchase orders?


Is the supplier’s personal information up-to-date (i.e. details of insurance and other certificates)?


Does the supplier have a rigorous governance framework to detect and eradicate the reputation risk of its upstream trading partners?


With the above risk management plans, we can implement the most effective China sourcing solutions in international trade to maximize the interests of both sides.