Supplier Risk Scoring System — Supplier Risk Index (SRI)

Framework: Supplier Risk Index (SRI) Price: $19 Category: Productivity / Risk Management Tags: supplier risk, vendor risk, procurement, risk scoring, ops, compliance last_validated: 2026-03-03

What This Is

The Supplier Risk Index (SRI) is a structured scoring system that produces a 0-100 risk score for every vendor across five dimensions. It classifies vendors into Green, Yellow, or Red tiers and prescribes specific actions for each tier. Run it at onboarding, annually, and whenever a vendor's situation changes materially.

Problem it solves: Ops teams can't manage vendor risk without a consistent framework. The SRI eliminates gut-feel risk assessments and gives procurement teams an objective, defensible methodology for prioritizing vendor oversight and making sourcing decisions.

Output: A risk score (0-100), tier classification (Green/Yellow/Red), and a recommended action plan for every supplier in your portfolio.

The SRI Framework

Five Risk Dimensions:

┌─────────────────────────────────────────────────────────┐
│              SUPPLIER RISK INDEX (SRI)                  │
│                                                         │
│  D1: Financial Stability           (max 25 pts)         │
│  D2: Single-Source Dependency      (max 20 pts)         │
│  D3: Compliance History            (max 20 pts)         │
│  D4: Performance Track Record      (max 20 pts)         │
│  D5: Geographic / Regulatory Risk  (max 15 pts)         │
│                                                         │
│  Total SRI Score: 0-100                                 │
│  (Higher = LOWER risk — score is a "health" score)      │
└─────────────────────────────────────────────────────────┘

Note: The SRI is a health score, not a risk score — higher is better. A score of 90 means low risk; a score of 20 means high risk. This keeps it intuitive: you want vendors to score high.

DIMENSION 1: Financial Stability (25 points)

Why it matters: A financially unstable supplier can't fulfill contracts, maintain quality, or stay in business. Financial instability is the leading cause of unexpected supply chain disruption.

What to assess:

Scoring Rubric: