⚠️ A Real Case: A Catastrophic Collapse Due to Poor Decisions
In 2018, Carillion, one of the UK’s largest construction and services companies, collapsed —
after issuing three consecutive profit warnings within five months.
The warnings exposed an escalating financial crisis that had gone unaddressed for too long.
The consequences were massive:
- 🔻 Over 20,000 employees affected
- 🔻 Critical government projects halted — schools, hospitals, rail systems
- 🔻 More than £7 billion in debt left behind
The causes?
✔️ Poor oversight of the company’s operational capacity
✔️ Ignoring early signs of financial distress
✔️ No backup plans in place by their clients and partners
This story isn’t just history.
It’s a powerful reminder: the questions you fail to ask at the start may lead to expensive lessons later.
Here are 3 essential questions every procurement professional must ask before signing with a supplier:
1️⃣ Can the supplier meet your quality and timeline expectations?
❗ If you get this wrong, the entire project is at risk.
How to find out:
- Review their historical performance — especially OTIF (On Time In Full)
- Speak with past clients
- Assess their current operational load and capacity
2️⃣ How financially stable is the supplier?
❗ An unstable supplier = a hidden risk to your organization.
How to assess:
- Review financial statements and cash flow
- Check for warning signs or credit ratings
- Request a third-party certificate of financial stability
3️⃣ Do you have a contingency plan if the supplier fails?
❗ No backup plan means you’re betting your success on hope — not strategy.
How to prepare:
- Identify alternative suppliers in advance
- Include flexible terms in your contracts
- Create scenarios for supplier disruption and test your response
🎯 Every procurement deal includes a defining moment —
You either ask the right questions… or pay the price later.
Have you ever seen a project fail due to supplier issues?
Share your story — your insight could help someone avoid a costly mistake.