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.
How should a business apply Supplier Due Diligence?
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.
What records support Supplier Due Diligence?
Keep dated source records, reviewer conclusions, unresolved findings, approval conditions and the next refresh date.
Supplier Due Diligence: what the sourcing record should show
| 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. |
What is a common Supplier Due Diligence mistake?
A completed questionnaire is supplier-provided information. Material claims still need independent evidence or verification.
