Until such times that they are directly faced with a problem it is the nature of most companies to assume that all is well with their systems and operating procedures.
The reality is that these are the companies that are most likely to be blindsided.
Constant monitoring of counter party risk is the order of the day combined with disciplined inventory control.
It can prove costly to rely on past performance as a guide to reliability in the future. Be alert to tell-tale signs such as unusual ordering patterns, delays in payments etc.
In truth very few businesses fail overnight and there are usually enough warning signals which should enable a supplier to reduce its risk.
Current market conditions will continue to test but undoubtedly there will also be opportunities for those placed to take advantage of less efficiently organised companies.
Those companies who are alive to risks are far less likely to fail compared to those who bury their heads in the sand.
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