# Working with Supplier Risk Assessments (QMS)

You can manage the risk associated with different suppliers through Risk Ranking & Filtering (Supplier Risk) Assessments, which identify and rank complex risk factors associated with engaging or continuing to use a supplier. This assessment considers factors such as quality, compliance, financial health, geopolitics, and business continuity. Vault calculates an assessment score and suggests a risk level using criteria defined by your organization. Supplier Risk Assessments make it easier for your organization to remain compliant with requirements for risk-based decision making.

## Process Overview

The Supplier Risk Assessment process may differ depending on your Vault's configuration and organizational requirements, but a typical process includes:

1. Define _Risk Factor Templates_ and add supporting records to store assessment data.
2. Create an _Assessment_ for a supplier and select a _Risk Factor Template_. The _Risk Factor Scorings_ section on the _Assessment_ is populated with _Risk Factor Categories_ based on the template you select.
3. Add a _Risk Factor_ to each _Risk Factor Category_ to allow Vault to calculate an _Assessment Score_ and suggest a _Risk Level_.
4. Determine the _Final Risk Classification_ based on the calculated _Suggested Risk Level_.

## Defining Risk Factor Templates {#define-template}

A _Risk Factor Template_ is a reusable collection of related records that defines risk factor categories, risk factors, and how risk factors are weighted and scored on a _Risk Factor Assessment_. This involves creating the following records:

* **Risk Factor Template**: This record anchors the structure of related records. Users select a _Risk Factor Template_ when creating a _Risk Factor Assessment_ record.
* **Risk Factor Category**: The general area you are assessing, for instance, the rate at which an organization completes CAPAs on time.
* **Risk Factor**: Specific details about the risk factor category. For instance in the context of evaluating the on-time CAPA completion rate, a number such as 95%.
* **Risk Level**: These records define risk levels, typically as low, medium, or high, and assign each a maximum threshold value.

To create a _Risk Factor Template_:

1. Navigate to **Business Admin > Objects > Risk Matrices**, or to a custom tab.
2. Click **Create**.
3. From the dialog, select the **Risk Factor Template** type and click **Continue**.
4. Enter a **Name**.
5. Enter a **Scoring Method**. This defines how Vault calculates the _Assessment Score_ for a _Risk Factor Assessment_.
    * **Sum**: The sum of all _Risk Factor Scores_ on associated _Risk Factor Scoring_ records.
    * **Average**: An average of all _Risk Factor Scores_ on associated _Risk Factor Scoring_ records.
    * **Multiply**: Vault multiplies all _Risk Factor Scores_ on associated _Risk Factor Scoring_ records. For instance, if the _Risk Factor Scores_ are three, two, and two, the resulting _Assessment Score_ is 12.
6. Click **Save**.
7. In the _Risk Factor Categories_ section of the newly created _Risk Factor Template_, create all relevant _Risk Factor Categories_ and assign each a weightage.
8. In the _Risk Level_ section of the newly created _Risk Factor Template_, create all relevant _Risk Levels_ and assign each a _Maximum Threshold Value_.
9.  Navigate to each _Risk Factor Category_, create _Risk Factors_ as needed, and assign a _Risk Factor Value_ to each _Risk Factor_ to determine their scoring.
10. When the _Risk Factor Template_ contains all relevant data, move it to the _Approved_ lifecycle state.

## Creating Risk Factor Assessments {#create-assessment}

To create a _Risk Factor Assessment_:

1. Navigate to **Business Admin > Objects > Assessments**, or to a custom tab.
2. Click **Create**.
3. Select the **Risk Factor** assessment type.
4. Select the type of evaluation in **Evaluation For**. If you select **Supplier Risk Assessment**, you must also select an **Organization**. Other types of assessments may require different information.
5. Select a **Risk Factor Template**.
6. Enter a **Description** and any additional required information.
7. Click **Save**. Vault generates _Risk Factor Scorings_ based on the _Risk Factor Template_ you selected.
8. In the _Risk Factor_ column of the _Risk Factor Scorings_ section on the newly created record, select applicable **Risk Factors**. With each additional _Risk Factor_ you select, Vault recalculates the _Assessment Score_, which determines the _Suggested Risk Level_. The _Assessment Score_ is calculated by multiplying the _Risk Factor Value_ of individual _Risk Factor Scorings_ by the _Weightage_, then by adding or multiplying the resulting _Risk Factor Scores_ together, or determining the average. Refresh your browser tab to see the latest calculated score and suggested risk level.
9. When you're finished selecting _Risk Factors_, edit the record and select a **Final Risk Classification**. You can optionally base this classification on the calculated _Suggested Risk Level_.