The Challenge: Reducing Supplier Risk
Atlas Copco needed a way to quickly assess the financial health of the many suppliers that provide the components used to build its innovative machines. Previously, the company used a summary of annual accounts to make this assessment, but with the number of suppliers growing to nearly 600, this method was proving cumbersome and time consuming. Without this information, Atlas Copco faced unknown but potentially significant risks from troubled suppliers.
The Solution: Increased Supplier Insight
Atlas Copco installed Dun & Bradstreet’s Supplier Portfolio Manager -- an online analysis tool that will integrate the company’s supplier data with Dun & Bradstreet’s global business database.
How It Works
Supplier Portfolio Manager provides Atlas Copco with three different types of supplier analyses.
First, it assesses the financial health of each supplier. This allows Atlas Copco to stay proactively informed of the evolving risk of existing and potential suppliers, so it can intervene before a supplier gets into possible trouble.
Next, Supplier Portfolio Manager analyzes the company’s dependence on each supplier, along with the potential risk resulting from the loss of a supplier.
Finally, the Supplier Portfolio manager provides a “family provider” analysis that uncovers corporate linkages among suppliers. This information can strengthen the negotiating position of Atlas Copco by enabling the company to generate group-level discounts.
Results & ROI: Reduced Supplier Risk, Improved Supplier Relationships
Supplier Portfolio Manager has provided several benefits for Atlas Copco.
- It has saved the company considerable time generating the data needed for a clear overview of who is a “healthy” supplier and who is not.
- Using the data and analysis, Atlas Copco identified and then spoke with vendors whose ratings indicated existing or potential problems. This not only led to productive dialogue and improved relations with vendors, but it often led vendors to take corrective action, when needed.
- The Supplier Portfolio Manager also produces analyses that give the company insight into its dependence on its suppliers, so company officials can assess and take steps to reduce our risks.
Finally, because of the “family provider” analysis that provides insight into corporate linkages among suppliers, Atlas Copco officials are able to develop a supply strategy with a competitive advantage. For example, the company can combine multiple orders from different organizations under a single supplier to help negotiate better terms.