Why Companies Need to Behave More Like Their Own Credit
Rating Agencies. Increasingly, suppliers' weaker balance
sheets are posing just as great a risk to companies as
suppliers' potential operational problems. By
rationalizing their supply chains during the recession,
many companies have inadvertently become more reliant on
fewer suppliers at exactly the moment when their own
finances have become weaker. Meanwhile, those same
suppliers are seeking to use their customers' balance
sheets to fund their working capital requirements. This
report, prepared by Oliver Wyman in collaboration with
the Association for Financial Professionals, argues that
supply chain risks have moved from the province of
engineers into the realm of chief financial officers and
treasurers. To emerge from the global recession
unscathed, companies should rethink their approach to
supply chains by behaving much more like their own
credit rating agencies - and fast. pdf 2012
