The 360° Risk Score is a value to determine how much at risk a target is. The 360° Score is available if at least 12 months of data is available.
The score consists of four components: Peer score, Alert score, Self-assessments and External data. There is the addition of the Tier N score although this data is not yet connected to the overall score of the target.
The score is dependent on the perspective of the user, and therefore it can vary between users. The groups from the perspectives can be expanded to show the event types included in the selected group.
The four components of the score are defined as follows:
- The Alert score (40%) is calculated based on the impact and the number of alerts associated with the target in question, the timing of these alerts as well as the target's size.
- Each alert has a priority that depends on the perspective. The higher the priority, the more impact an alert has on the risk score. For example, an alert with a Mid priority has a lower effect than an alert with a Critical priority.
- The more alerts there are associated with a target the higher the effect on the score.
- Different events impact the score for a different time and all events impact decays over time. A minor event's impact decays fast whereas the decay of a major event's impact takes longer.
- The alert score is normalised based on the size of the target. It is expected that there are more risk events happening the bigger the target, and therefore the impact of a single alert decreases with the company size.
- The Peer score (30%) consists of the Alert scores of all companies in the same industry (Industry risk) as well as the Country risk.
- The only difference of the Industry risk in relation to the standard Alert score is that the timing is not taken into account. Therefore, the Industry risk is an assessment of the given industry's riskiness based on all alerts in Prewave in that industry, irrespective of when they were created.
- The Country risk is not calculated based on Prewave alerts. Various publicly available indices published by international organisations such as ILO (International Labour Organization), ITUC (International Trade Union Confederation) and EPI (Environmental Performance Index) are the data source for this score.
- Self-assessments (20%) completed on Prewave by a supplier. Those can also be taken into account in the risk score. This component is only available for those suppliers who have completed a self-assessment, and the overall score can also be calculated without it.
- External data (10%) provided by the Prewave user can also be considered in the risk score. External data could be for example the user's own risk assessment of a supplier. The value must be provided in a numeric format. This is an optional component of the score, and the overall score can be calculated also without external data.
Tier N score provides an abstract overview of a target’s deeper supply chain, considering the Industry Risk and the Commodity Risk (when a supplier is associated with a commodity in prewave). It can be used to assess critical suppliers in the Supply Chain.
Finally, the different components are weighted and combined in a single overall score. The score can also be easily calculated for different perspectives. As different event types can be weighted differently (or have a different priority) in each perspective, the score will also change accordingly.
Underneath the score all connected alerts that have an effect on the score are listed. The alerts are listed dynamically, meaning that for example selecting only a single risk category or a time frame will result only in the related alerts to be shown.
The same will happen if you select the Peer score individually.
By hovering the mouse on top of a specific country a small window will appear and if you select the small question mark (?) it will show related indices connected for the selected group(s).
The 360° Risk Score Development shows the changes in the past 24 months. Per click on a time frame the alerts are filtered. The score will improve each month if no new alerts are created. The graph can also be used to isolate alerts that happened in any specific month.
The Risk Matrix will be further explained on the Analysis page.