Supply risk mitigation is one of the primary concerns of the manufacturer． We consider a manufacturer facing an unreliable supplier with private information on high or low initial reliability，and the initial reliability can be enhanced through process improvement initiated by the supplier． In the presence of such endogenous disruption risk，we utilize the principle-agent theory to analyze how the manufacturer designs the procurement contracts and motivates the supplier’s process improvement to reduce the likelihood of supply disruption．We derive and compare the optimal decisions of both the manufacturer and the supplier under full and asymmetric information． The results show that，information asymmetry with hidden action does not necessarily decrease the supply chain’s profit or generate information rent，and the manufacturer could optimize the procurement contracts under asymmetric information by balancing the trade-off between the information rent and the loss of the supply chain’s profit． When the initial reliabilities and the supplier’s bargaining power satisfy several conditions，the supplier will reveal the private information voluntarily and share the supply chain’s profit with the manufacturer． The conclusions in this paper are valuable and significant to the procurement activities in the presence of supply risk．