Supplier Financial Health Monitoring involves analyzing financial statements, credit ratings, payment behavior, and market indicators to detect deteriorating financial conditions before they cause supply failures. Organizations use credit monitoring services, D&B scores, predictive analytics, and direct financial reviews for critical suppliers. This enables proactive dual sourcing, inventory buffering, or supplier support decisions. An automotive manufacturer's monitoring system flagged a critical semiconductor supplier's declining working capital ratio and increasing debt covenant risk six months before bankruptcy filing, allowing time to qualify alternative sources and avoid production shutdowns that affected competitors.