Solving Tier 2 Supply Chain Risk
Background
A leading automotive retailer with a US-based manufacturing plant. This company manufactures over 600,000 vehicles globally, with over 600 domestic parts suppliers across North America, purchasing over $37 billion of parts over the past five years.
Challenge
The company was growing concerned about supply chain risk that existed outside of their zone of influence. They had visibility into the risk of their immediate suppliers (Tier 1), those that would provide individual parts used during the automotive fabrication process, but they did not have visibility into the vendors these suppliers used (Tier 2). There was a real possibility these Tier 2 suppliers could be at risk of failing which, in turn, could have an effect on multiple Tier 1 suppliers, causing a major disruption in the overall supply chain.
Solution
We created a secure, web portal each Tier 1 supplier could sign up for and enter in their own supply base information (Tier 2 suppliers). Then, through a partnership with a global leader in predictive supplier risk data, we provided key risk-based metrics back to the Tier 1 suppliers on a monthly cadence. We brokered a negotiation between the company and the risk data provider that allowed the participating Tier 1 suppliers to only pay a nominal fee per Tier 2 supplier entered. The company would also gain access into this risk data, providing them the much needed visibility into their potential upstream Tier 2 risk. This gave the company an opportunity to partner with their Tier 1 base in cases where any risk needed to be mitigated.