Protecting The Supply Chain: Differentiating Large And Small Suppliers

Abstract

This paper recounts the history of early warning failure models and then adds to that literature by evaluating the proposition that all suppliers can be treated similarly when evaluating failure tendencies. The work is performed for the automobile supplier industry because that industry has a long and complex supply chain structure and because we have a history of working with major automotive OEMs to protect their supply chain. The project benefited from the support and cooperation of BBK Ltd. the largest turnaround firm worldwide engaged by the automobile sector. In contrast to previous work which utilized a single predictive model to indicate the likelihood that a supplier company was in distress, our effort tested the idea that large and small automobile suppliers face different exigencies and therefore require separate predictive models. The paper concludes by identifying the key factors to consider when reviewing the health of automobile suppliers.