Supplier due diligence examines the identity, ownership, conduct, capability and risk of a potential or current supplier. The depth should match the value, country, product and consequence of failure.
The operating decision
Start with legal identity and ownership, then expand into sanctions, adverse information, financial condition, labor and environmental exposure, data or intellectual-property risk and subcontracting.
Evidence to retain
Keep dated source records, reviewer conclusions, unresolved findings, approval conditions and the next refresh date.
| Area | What to record |
|---|---|
| Decision | Start with legal identity and ownership, then expand into sanctions, adverse information, financial condition, labor and environmental exposure, data or intellectual-property risk and subcontracting. |
| Evidence | Keep dated source records, reviewer conclusions, unresolved findings, approval conditions and the next refresh date. |
| Watch point | A completed questionnaire is supplier-provided information. Material claims still need independent evidence or verification. |
A common sourcing mistake
A completed questionnaire is supplier-provided information. Material claims still need independent evidence or verification.
Related definitions: strategic sourcing, supplier prequalification, landed cost.
