How KION Built World-Class Supplier Risk Management

From a reactive, crisis-driven approach to a proactive, data-informed strategy, KION Group re-engineered its supplier risk management capabilities. This transformation, with Everstream Analytics at its core, has enabled the global material handling giant to build a more resilient and predictable supply chain. 

The Catalyst for Change 

With over 42,000 employees worldwide and more than 1.9 million companies using their products, KION Group operates one of the most complex supply chains in the material handling industry. When COVID-19 disrupted global supply chains in 2020, this complexity became a critical vulnerability. Like many organizations, KION Group, and the pandemic impacted the company’s multi-tiered supplier network.    

“These global disruptions created a massive challenge,” says Jakub Watemborski, Director of Global Supplier Risk and Capacity Management at KION. “We spent lots of time on firefighting and task force management.” 

The firefighting worked. Teams successfully mitigated risks and delivered goods to customers. However, this reactive approach came at a significant cost in both resources and organizational focus. KION’s leadership recognized that a fundamental shift from reactive to preventive mode was essential for long-term success and competitive advantage. 

This realization triggered a complete reorganization of the procurement function. The company established a new Supplier Performance Management team and, within this structure, created a dedicated global risk management function. Watemborski’s team now spans over 10 people working across three continents – APAC, EMEA, and the Americas –ensuring 24/7 coverage and continuous monitoring of supplier risks. 

A New Approach to Risk: Beyond Spend 

Watemborski advises organizations to “start with a purpose” before undertaking a supplier risk visibility journey. For KION, that purpose was clear: prevent disruption where possible through proactive risk management rather than reactive crisis response. 

The second critical step was to map what matters. KION’s team quickly determined that traditional spend-based analysis was insufficient for identifying truly strategic suppliers. Some smaller-spend suppliers delivered critical components that could halt production across multiple facilities, while conversely, some high-spend suppliers posed minimal operational risk. 

“We have many risks that materialized with much smaller suppliers,” Watemborski notes. “But we put effort into preventing risks for much bigger and more important suppliers.” 

To address this gap, the company developed a sophisticated Business Impact Score. This multi-dimensional metric evaluates suppliers across several critical dimensions where spend has a smaller share.  

This data-driven approach revealed important insights and allowed KION to focus its resources on the suppliers that posed the greatest operational risk, regardless of their contract value. The Business Impact Score enabled the company to allocate monitoring and mitigation resources effectively, focusing intensive efforts on truly critical suppliers rather than spreading resources too thin across the entire supplier base. 

Identifying the Risk Landscape 

KION classified risks into six major categories that could impact operations. These are: 

• Geographic and geopolitical risks 
• Critical supplier risks 
• Operational risks  
• Financial risks 
• Sustainability risks 
• Cyber risks 

Building an Integrated Risk Intelligence Ecosystem 

Once KION identified which suppliers and risks it needed to manage, the company needed technology infrastructure to operationalize this strategy at scale.  

The company architected a comprehensive technology ecosystem with Everstream Analytics serving as the central intelligence and control hub. This platform stores comprehensive 360-degree strategic risk scores for each supplier, consolidating data from multiple specialized sources. 

“We combine different solutions to contribute to this one risk score,” Watemborski explains. “Through that we have it stored and documented for every supplier.” 

Some tools connect through APIs for real-time data exchange, while others require periodic manual data uploads. The key is integration: combining external data with internal expertise to create comprehensive, actionable risk profiles. By unifying these disparate data streams within Everstream, KION created a single source of truth, enabling teams to quantify and prioritize risks based on both their potential impact and their likelihood of occurrence. 

Quantifying Risk and Impact 

KION developed a sophisticated methodology to make risk tangible and actionable. The company built a complex model that calculates the potential impact if any supplier stopped delivering, estimating how many trucks KION could not produce or sell over the next 12 months. 

The model considers multiple factors to calculate the potential impact. KION multiplies impact by likelihood to calculate expected risk, creating a clear priority matrix for procurement teams.  

The company also weighs different risk categories. These depend on the threat level they pose. Financial risks, cyber risks, and geographic risks receive the highest weights because these categories have the potential to cause the most operational pain. 

Strategic Decision-Making and Governance 

The most challenging aspect of supplier risk management isn’t identifying risks. Instead, it is deciding which ones to address and how to allocate limited resources. 

“It’s always a matter of business decision,” Watemborski explains. “Sometimes we accept certain risks, but at least we know about them.” 

KION operates in two modes. Reactive task force management handles materialized risks effectively, with robust, tested processes for logistics issues, quality problems, supplier bankruptcies, and cyber attacks. Preventive mitigation proves more complex, as the company cannot maintain second sources for every component, relocate all production, or increase inventory everywhere.  

KION balances resilience against cost, quality, and service requirements. Different teams have different priorities and KPIs. The risk management team provides visibility and recommendations, while business leaders make final decisions based on comprehensive risk profiles. The key is documentation: KION records every risk and decision, enabling informed trade-offs rather than pursuing the impossible goal of zero risk.  

The company structured its supplier risk management program around clear governance and distributed execution. The global risk management team operates as an enabler rather than sole executor, coordinating with procurement, logistics, and operations teams who take action. Governance operates on multiple levels: daily operational monitoring identifies emerging issues, quarterly regional meetings bring together local leadership to discuss priority cases, and quarterly global meetings with senior leadership address strategic risks and major mitigation decisions. 

KION also established comprehensive Supplier Readiness and Development processes. The company assesses risks before awarding contracts, conducting deep-dive checks covering cyber, financial, and geographic risks for major awards. After contract award, continuous monitoring begins, with suppliers sharing data regularly and KION tracking performance through comprehensive scorecard management. 

Measurable Results and Ongoing Value 

The implementation of this integrated risk management program has delivered significant, measurable value across the organization.  

Enhanced Visibility: When hurricanes Milton and Helena threatened a high-purity silicone mine, KION identified the potential impact quickly and activated mitigation plans before production was affected. 

Proactive Mitigation: Suppliers share capacity data monthly or quarterly, allowing KION to prevent shortages regardless of root cause. 

Reduced Financial Exposure: The financial risk program has proactively addressed supplier instability, reducing expected risks by hundreds of thousands in profit through proactive mitigation. Even when risks don’t materialize, improved visibility enables better strategic decisions.  

Improved Cyber Resilience: Suppliers with the lowest security ratings have significantly higher incident probability. KION address vulnerabilities before they cause disruptions.  

Supplier Partnerships: “We learned from each other together,” Watemborski reflects. “Right now, we have many success stories when suppliers collaborate and improve their KPIs.” Suppliers initially resistant to KION’s requirements eventually embraced the partnership, recognizing the mutual benefits of improved risk visibility and operational performance. 

A Resilient Future 

KION’s transformation from crisis-driven firefighting to proactive risk management demonstrates what organizations can achieve with clear purpose, appropriate technology infrastructure, strong governance, and collaborative supplier partnerships.  

By moving beyond reactive problem-solving, KION has built a resilient supply chain founded on data, collaboration, and foresight. Their journey illustrates how a unified analytics platform can transform risk management from a defensive necessity into a strategic advantage, protecting operations and enabling sustainable growth.