busines-hold-target-with-arrow-stacking-wooden-blocks-into-steps_34936-2254 It is for these reasons that strategic sourcing outsourcing becomes an important approach when companies seek to build a more sustainable competitive advantage. The outsourcing of a business function is the process of hiring a third-party vendor or transferring certain functions of a business process, and the benefits include getting access to specialized expertise, achieving and sustaining cost reductions, and flexibility of operations. However, Strategic Sourcing Outsourcing also brings various supplier risks that must be addressed properly. That is why it is critical for any business that wants to make efficient use of outsourcing to deliberate on an effective way to handle supplier risks. Key Strategies for Managing Supplier Risks in Strategic Sourcing Outsourcing The cost of the negative impact on the relationship can be reduced if a participant resorts to the formation of preventive measures for the control of the risks. The following strategies assist an organization in reducing supplier risks and improving the benefits of strategic sourcing outsourcing. Conduct Thorough Supplier Due Diligence Therefore, the first step towards risk management involves proper scrutiny of prospective suppliers. By reviewing its financial position, business reputation, and records concerning any legal issues, the business can prevent problems with a particular supplier. Measuring suppliers against established criteria of reliability and standard compliance facilitates the achievement of business standards in the partnership. Moreover, continued auditing and assessment enable the suppliers’ risk level to be monitored constantly and problems to be identified before getting out of hand.