Risk managers in the UK public sector and financial services are facing unprecedented challenges in managing their supply chains. The importance of supplier risk management has never been greater.
Major disruptions in recent years like Brexit and the pandemic have exposed vulnerabilities, while economic turbulence threatens supplier stability. For instance, 80% of UK businesses recently said Brexit was their biggest supply chain disruption, and 83% fear the worst impacts are still ahead. Meanwhile, nearly 24,000 UK companies went insolvent in 2024 alone, underscoring the financial risks lurking in supplier networks.
In this high-stakes environment, simply trusting gut instinct or spreadsheets is no longer enough. New regulations are raising the bar. The UK’s Procurement Act 2023, for example, has overhauled public procurement with stricter exclusion rules and a public debarment list for risky suppliers. Whether you're responsible for government contracts or third-party vendors at a bank, you need to know when it’s time to upgrade your approach.
Here are the top 7 signs that signal you need a dedicated supplier risk management software before a supplier failure catches you off guard.
1. Overreliance on manual processes
If your team is still wrestling with Excel sheets and email threads to track supplier risk, that’s a red flag. Managing dozens or hundreds of suppliers manually is error-prone and unsustainable. It becomes nearly impossible to monitor real-time changes or spot early warning signs.
In fact, only 24% of executive teams have fast-tracked investment in new procurement technology, meaning most organisations are overdue for an upgrade.
A modern supplier risk management software automates data collection and analysis, and ensures nothing falls through the cracks.
2. Surprise supplier insolvencies
Have you ever been blindsided by a supplier going bust? Sudden supplier insolvency can halt critical projects overnight. The collapse of outsourcer “Carillion” in 2018, and more recently, the collapse of ISG in 2024, were wake-up calls. Over 30,000 companies were left unpaid in its aftermath. If you worry that a key vendor could fail without warning, it’s a sure sign you need better financial monitoring.
The UK saw almost 24,000 business insolvencies last year, and rising interest rates and inflation continue to pressure suppliers. Good supplier risk management software continuously tracks suppliers’ financial health (e.g. debt levels, credit scores, filing delays) and alerts you to red flags long before a collapse makes news.
3. Mounting regulatory compliance pressures
Organisations in regulated sectors are under intense scrutiny over their third-party risk management. UK regulators and auditors increasingly expect robust controls. For example, the Procurement Act 2023 enforces tougher exclusion grounds for public contracts. Firms must ensure suppliers (and even their parent or affiliate companies) haven’t engaged in fraud, money laundering, or other violations that could get them debarred.
Likewise, financial regulators demand proof that banks and insurers have vetted the resilience of critical vendors. A recent case in point is Standard Chartered, which was fined $1.1 billion for serious breaches of anti-money laundering and sanctions regulations; an example of what can happen when due diligence processes fail.
If keeping up with compliance requirements or producing audit trails on supplier due diligence is giving you headaches, it’s time to consider a software solution. The right platform centralises all your supplier data, documents, and risk scores. It makes it easy to demonstrate compliance and avoid regulatory breaches.
4. Post-brexit supply chain volatility
Brexit has fundamentally changed trade rules and introduced volatility into UK supply chains. Tariffs, border delays, and evolving standards mean that suppliers can be affected overnight by policy shifts. Add global events like the pandemic or the war in Ukraine, and you have a recipe for constant uncertainty.
If external shocks often leave you scrambling to identify which suppliers are affected or how to respond, you likely need a more dynamic risk management tool. Supplier risk management software can provide scenario analysis and real-time alerts.
For instance, you can model how a new trade regulation or currency fluctuation might impact each supplier, allowing you to anticipate problems instead of reacting late.
5. Lack of visibility into supplier health and performance
Do you have clear, up-to-date insight into each supplier’s risk profile? If not, that lack of visibility is a sign of trouble. Many UK organisations rely on annual supplier reviews or credit checks that quickly go out of date. Key warning signs (like deteriorating financials, legal disputes, or late deliveries) can be missed in between check-ins. You shouldn’t have to piece together information from scattered sources.
Modern supplier risk management solutions, like Company Watch, offer a central dashboard where you can see all risk indicators at a glance, from financial metrics to compliance scores.
This holistic view is crucial if you want to catch issues early. Remember, knowledge is not just power. It’s protection. The more you know about a supplier, the easier it is to spot weaknesses and make informed decisions.
6. Frequent supplier disruptions or close calls
Maybe you’ve had a few near-misses. A supplier delivered late, or a single-source vendor had a hiccup that almost shut down a service. These incidents often signal deeper vulnerabilities in your supply chain. Don’t wait for a crisis to take action.
If you find your team constantly firefighting supplier issues (quality problems, delays, compliance scares), it’s a sign that a proactive approach is needed. Supplier risk management software helps you move from reactive to proactive. It can send early warnings (for example, if a supplier’s risk rating worsens or if news surfaces about potential trouble) so you can act before a minor issue escalates into a major disruption. In an environment where 80% of businesses say supply continuity has been put “on life support” by recent shocks, being proactive is key to resilience.
7. High-stakes or highly regulated contracts
Some suppliers are simply too critical to manage with half-measures. If you deal with high-stakes contracts e.g. an IT vendor handling sensitive data, or a construction firm building public infrastructure, the cost of a supplier failure is enormous. The same goes for suppliers in sectors with strict standards (finance, healthcare, defence). A slip-up by a third party could land your organisation in the headlines.
In these cases, best practice is to use specialised software for continuous oversight. You need to track everything from service levels to financial stability and cybersecurity practices. A dedicated tool will ensure that no matter how highly regulated or mission-critical the supplier, you have a 360° view of their risk and can intervene early if needed.
Mitigating supplier risk: The way forward
Recognising these warning signs is the first step. The next step is implementing a robust solution to mitigate supplier risk before it’s too late. This is where a platform like Company Watch can make all the difference.
Company Watch’s supplier risk management software is purpose-built for key contracts, helping risk managers gain confidence in their supply chain. It continuously monitors financial and operational indicators, using advanced analytics to flag trouble well in advance. For organisations in the public sector or financial services, this level of foresight is invaluable for staying compliant and resilient.
Don’t wait for a supplier bankruptcy or compliance scandal to force your hand. Investing in the right tools now will save headaches down the line. With stronger supplier risk management in place, you can focus on opportunities instead of worrying about the next crisis.
