Supplier due diligence: predict failure before it bills you.
Great proposals mask fragile suppliers. Due diligence should move beyond tick-boxes to a failure-prediction exercise, encompassing director linkages and beneficial ownership, sanctions and adverse media, financial resilience under realistic payment terms, litigation history, and site checks where performance risk is high.
Two high-yield questions:
- What must be true for this supplier to succeed under our actual conditions (cash-flow timing, governance, safety)?
- How would failure show up early in our data (missed milestones, quality drift, subcontractor churn)?
Build monitoring triggers into the contract itself. Procurement isn’t finished at award; it is an ongoing test of a hypothesis: that this counterparty will deliver safely, ethically, on time.
Keep testing, and be willing to update your beliefs.
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