7/21/2019 Case Study 1

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Case Study (Risk Management): Risk of bankrupt supplier equipment supply.

In 2014, One of major EPC company & client faced the rorder to oiler s!pplier "itho!t kno"ing the #nancial dthe s!pplier$ %oiler s!pplier "as !nder high det for adfarication yard in 2010$ %!t lo" income d!ring recessi2014 ca!sed defa!lt of the ank loan payment$ EPC anthe old appro'ed s!pplier list and didn(t re'ie"ed the lstatement of s!pplier$ )hey placed the order to that s!p*!se+!ently ank seied the ank acco!nts of s!ppliepayment of loan$ It ca!sed delay of oiler farication, lerisk of losing ad'ance payment$

-isk .itigation *trategy/ l"ays re'i#nancial statement of s!pplier efore placing the orlead items or high capital cost item$ -eject the s!ppsitting on 'ery high det in comparison to income$ the s!pplier ased on cost, +!ality, s!pply time and health$