The Need For Supplier Risk Assessment

Counter party credit risk is becoming important nowadays; advanced risk management methods are being implemented in power and financial-services sectors. Transportation infrastructure industry lag behind but the need is immediate. Technicality in rail infrastructure is complex, thus the need for assessing risk. Failures are growing due to lower rated original equipment manufacturers (OEM). It is necessary to integrate systematic assessment of credit risk into the supplier selection process. Minimum rating requirement could be a way out allowing customers to control and lower the risk of supplier default.  This increases transparency, improves efficiency of risk assessment and facilitates monitoring of counterparties.  Customers of railway projects should learn from the available risk assessment methods and use them to their benefit. Read more at:

http://www.mckinsey.com/insights/risk_management/managing_supplier_risk_in_the_transportation_and_infrastructure_industry