To better manage global supply-chain risks and address any warning signs of fraud, abuse, and waste, Deloitte suggested companies take these four steps:
- Know your supplier to identify and prioritise risk.
Gather information internally and externally to identify potential risks involving suppliers and business partners, including what relationships to government entities they have, how they are compensated, what the scope of the relationship is, and what compliance programmes they have. Run a background check on suppliers to detect potential risk indicators.
- Map the volume of products flowing around the world.
Use mapping software to visualise product flows as lines whose thickness represent corresponding volumes. This type of map can reveal vulnerabilities, such as large volumes of supplies flowing into high-risk regions.
- Identify, investigate, and confirm anomalies.
Review transactions for accuracy, authorisation, existence, and approval. Look for anomalies by, for example, assessing the responsiveness of the supplier, checking the information of an invoiced item and the rate charged, looking for any notations providing information about a transaction. Get documentation to vet gathered transaction data.
- Track, manage, and learn from the information.
Establish a supplier database that contains compliance and risk data, such as audit history, total spend, and geographic location. Sort suppliers into risk tiers to help prioritise, manage, and enact corrective action plans.
Read more at 4 steps to better manage global supply chain risks
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