Don’t Break the Supply Chain: 5 Risk Management Questions FMs Should Ask
Most company leaders understand that their organizations are responsible for maintaining safe and healthy conditions in their workplaces while ensuring their workforce adheres to safe practices in the performance of their work both on and off the jobsite. But it bears reminding that this responsibility spans the length of a company’s supply chain, including third-party contractors and vendors.
Managing risk across the entire operation is new territory for many firms. In 2019, half of respondents to a survey of supply chain organizations indicated that they lacked an efficient means of assessing the safety record and compliance histories of firms under consideration for hiring as contractors or subcontractors. This common and avoidable blind spot in vendor selection exposes firms to a host of risks that can lead to injuries, productivity loss, or damage to property, the company’s reputation and its bottom line.
The world has grown more conscious of safety risks and liabilities. COVID-19 has caused companies reconsider their approaches to occupational safety and health, and to adopt new measures to protect their workers and communities. There is a growing need to ensure third parties comply with the larger organization’s health and safety rules and standards, and a realization that regulators will hold the company accountable for risk management contractors and subcontractors as well as direct employees.