Why is the supplier credit rating necessary?
Purchaser
· The purchasers are using the credit information of the applicable companies to source new suppliers
or to continue the businesses with the existing suppliers.
· When a supplier is in dangerous business situation such as the financial problem, bankruptcy, etc.,
the purchaser comes to face a problem of timely product supply and so they are monitoring the situations related
with the credit rating and the financial conditions of suppliers continuously.
Supplier
· The supplier should prove it does not have a problem of credit to supply the goods to a purchaser and
can continue the business with a purchaser through this in the long-term perspective. Also, the supplier can
have a chance of developing various customers through this credit rating.
Lots of purchasers are using the credit reports.
· A lot of leading companies in the world are using the credit report in their businesses with suppliers.
· In case of Korea, large conglomerates such as Samsung, LG, Hyundai, etc. are using the credit report now to
assess the financial conditions of suppliers.
Please refer to the following sample report.
