Supplier Risk Assessor

Supplier Risk and Trade Spend Management

Managing the external nodes of your supply chain—from ingredient suppliers to retail distributors—is critical to maintaining consistent margins. A disruption at a single supplier or an unmanaged trade spend budget can quickly erode a quarter's profitability.

Assessing Supplier Risk

Relying on a single supplier for a critical ingredient is a massive operational risk. A robust supplier risk management program involves dual-sourcing key inputs and continually evaluating suppliers on metrics such as delivery reliability, price volatility, and compliance status. If a primary supplier's organic certificate expires, your system should automatically flag the risk before a purchase order is issued.

The Black Hole of Trade Spend

Trade spend—the money paid to retailers and distributors for promotions, slotting fees, and shelf placement—is typically a CPG brand's second-largest expense after COGS. However, many brands fail to track the ROI of these promotions. If you offer a 15% off-invoice allowance, does the resulting volume lift generate enough gross profit to justify the spend?

Disputing Retailer Deductions

When retailers take deductions for shortages or late deliveries, the burden of proof is on the brand to dispute the chargeback. Without a centralized system that instantly links Purchase Orders to signed Bills of Lading (BOLs) and Proof of Delivery (POD) documents, disputing these deductions is often too time-consuming to be profitable, leaving money on the table.