SME suppliers should not be treated like lemons – squeezed until they run out of juice and then replaced with some other lemons. This approach just discourages them from investing time and money in risk management.
Those of us in large corporations know that we have SME suppliers and customers, and this relationship means that how they manage their risks can have consequences for us. Business continuity is the most obvious exposure, but we also need to think about quality and reputation, cyber security and liability, among other risks.
With this in mind, FERMA organised a workshop on SMEs at the Forum in Venice in October 2015, and people who took part wanted to elaborate on this subject. Therefore, on 3 October during the coming FERMA Seminar in Malta, we will have a roundtable discussion on how SMEs can deal with risk.
We know that often liabilities and insurance issues are, among others, not managed to the benefit of an equitable partnership between the large corporation and its smaller suppliers and customers. The SME’s first line of contact is often the purchasing department which has no awareness of risk or insurance management. Academic research has shown that many SMEs do not – or do not adequately- apply risk management practices because of lack of financial resources and knowledge.
In our session, we will consider how to deal with our SME suppliers in a sustainable way.
- What risks to the SME should we be aware of? Are they the same as a large corporation faces?
- How do SMEs deal with these risks, and how could they impact us?
- How can SMEs and their large corporate customers find a common risk language to understand each other better in day to day business cooperation?
The focus should be on discussion and negotiation, educating the SME supplier instead of squeezing them