Mastering Risk Management

THIRD-PARTY RISK MANAGEMENT

Third-party risks and risk assessment

Many of the risks which we have identified earlier in this chapter about outsourcing, apply to all third parties, including the supply chain. The big difference of the supply chain is the variables. Disruptions can come at any level of the chain. In a survey conducted by BCI and Zurich Insurance, over 85% of companies had suffered at least one supply chain disruption during the year. Even more concerning is that 40% of the reported disruptions originated in a sub-tier supplier, not the direct supplier. Time-sensitive processes can be lost through weather, sudden labour shortages, political unrest or microbursts in demand.

Third party risk is complex and its complexity is one of ...