A Supplier Risk Assessment Matrix is a risk management tool used by businesses to systematically evaluate and categorize external suppliers based on the level of risk they present. It is a key component of any company’s supplier relationship management (SRM) process, and helps organizations identify, quantify, mitigate, and manage supplier-related risks. The Matrix typically considers factors such as financial stability, performance reliability, quality assurance, security and compliance standards, geographical location, and other activities that may affect the business’ supply chain. By implementing a Risk Assessment Matrix, businesses can gain a better understanding of their supplier relationships and ultimately optimize their purchasing decisions.