The Procurement Glossary » Risk Assessment
Risk Assessment
Compliance & Risk
Definition
The process of identifying risks and evaluating their likelihood and impact to prioritise mitigation.
Explanation
Risk assessment underpins the risk register and sourcing decisions: it scores risks so effort focuses on the most serious. In procurement it covers suppliers, categories, contracts and supply continuity.
Example
A risk assessment scores the new overseas supplier high on geopolitical and logistics risk.
Related terms
- Risk Register — A structured record of identified risks with their likelihood, impact, owners and mitigation actions.
- Supply Risk — The risk that supply of a good or service is disrupted, constrained or made more costly.
- Supplier Risk — The exposure a buyer faces from a supplier's potential failure — financial, operational, compliance or reputational.
- Due Diligence — The investigation of a supplier's legitimacy, capability, financial health and compliance before engaging it.
Frequently Asked Questions
What is Risk Assessment?
The process of identifying risks and evaluating their likelihood and impact to prioritise mitigation. Risk assessment underpins the risk register and sourcing decisions: it scores risks so effort focuses on the most serious. In procurement it covers suppliers, categories, contracts and supply continuity.
Can you give an example of Risk Assessment?
A risk assessment scores the new overseas supplier high on geopolitical and logistics risk.
Back to the procurement glossary | Procurement concepts | Contact us