Tag Archives: social

How to analyse third-party risks in the supply chain

Posted on by
How to analyse third-party risks in the supply chain

How to analyse third-party risks in the supply chain

What are the cybersecurity, financial and other risks posed by third parties in the supply chain, asks Sri Rangachary, a Senior Director with ISG
Do you truly know your exposure to risk? With every third-party supplier an organisation uses, there is increased risk of being exposed to a security breach, a damaging reputational issue, or a human rights or environmental issue that could be buried within the supply chain.

We tend to think of disruptive events as happening once in a lifetime, but in reality, we should plan for them to be a regular feature of supply chains and manage them accordingly. Proper governance and rigorous supply chain review are critical.

What are the risks posed by third parties in the supply chain? The most obvious risks are cyber security or financial. Imagine if one of your supplier’s suppliers has a ransomware attack that spreads up the chain. Your security is only as strong as the weakest link in the supply chain. An event like this could severely disrupt your ability to do business.

But there are less obvious, newer risks from suppliers. Increasingly we’re seeing emerging threats from areas like environment, social and governance (ESG), and human rights.

Perhaps there are modern day slavery practices that you haven’t spotted, deeply embedded in the supply chain, or a supplier has been found guilty of corruption, or other unethical behaviour. It’s not enough anymore to claim ignorance, and you could lose your hard-won reputation by association with such practices.

You need the right processes in place to catch and head off these kinds of issues, early on.

Managing supplier relationships

The key to good supplier management is good information. What information do you need to mitigate your risk? I’m often asked: “How do I assess the risks from my supply chain?” The answer is in the information you get from that chain.

Look first at the information you have internally available. What is the acceptable risk level in your own business? Every organisation will have a different appetite for risk. A risk heat map is a great way to visualise the impact and likelihood of different risk categories, so you can develop the appropriate response.

The role of technology

It’s simply not possible for a person – or even a full team – to monitor every change and movement that could pose risk within the supply chain. This is where technology can help.

A good third-party risk management system can give you the information you need to monitor and mitigate risk, as well as keep on top of contractual commitments and the performance of your suppliers (including their ability to meet those commitments).

Read more at How to analyse third-party risks in the supply chain

Leave your comments below and subscribe to us for new updates.

Analysis – what impact will Brexit have on supply chain operations?

Posted on by

Brexit is a great uncertainty for businesses operating cross-border. Therefore, it is crucial for companies operating complex supply chains to consider the implications of Brexit on their businesses.

A PESTLE is an analysis tool that provides an understanding of the factors and external changes to the business, which may impact their ability to operate and thrive.

In this article, Nicholas Hallam considers the elements of Brexit that are out of the control and influence of businesses, but which they should still be planning for, as well as the proactive steps they can take to guide strategic decision making.

Political

Brexit has been an intensely political issue – from the original promise of the In/Out referendum (made by David Cameron to prevent a haemorrhaging of Tory support to UKIP) right through to the political and legal disputes about the triggering of Article 50 and the ongoing controversy about the trade-off between free movement and the single market. The debate – which cuts across traditional political alignments – pits sovereignty against efficiency, and the citizens of definite somewhere against free-flowing globalists.

Economic

The UK runs a constant trade deficit with the EU. While the UK’s biggest individual export trade partner is the US, over 62% of all exports went to the 27 EU Member States during Q1 2017, totalling £33.1 billion. And during this time-period the UK’s top import partner was also an EU Member State, Germany (£17.6 billion worth of goods).

Social

While Brexit essentially means untangling the links that the UK has with the EU, there are many ways in which we will stay connected irreversibly. Some of the biggest technological advances in recent years – such as smart phones and social media – have been made to connect people no matter their location, language or economic status. So, while the government may have a protectionist ethos, it may be increasingly impractical to implement to live up to most people’s expectations and habits.

Read more at Analysis – what impact will Brexit have on supply chain operations?

What’s your thoughts about Brexit and supply chain? Share with us in the comment box and subscribe us to get updates.

Related articles

Socialbakers bakes its data analytics down to a Social Health Index

Posted on by

Can social media analytics be compressed into an elevator pitch?

That was a question Lenovo asked its social analytics firm, Socialbakers. The result, launching today, is a Social Health Index that presents a few top-level indicators of a brand’s standing in social media vis-a-vis any competitors.

“When you’re with a VP, you have to [quickly] give them a very clear idea of where we stand,” Lenovo’s director of the Digital and Social Center of Excellence Rod Strother told us. Given that need, Lenovo then provided input to Socialbakers for developing the Index.

It offers a single top-level number on a 100-point scale, as well as single numbers representing the client’s — or a competitor’s — social health on Facebook, Twitter, or YouTube. Other platforms will be added at some point, the social analytics firm said.

Additionally, an area graph visually depicts the four groups of data that go into the scores — participation, follower/fan/subscriber acquisition and retention, and shareability.

“We find it’s difficult for clients to comprehend all” the statistics in ordinary social analytics reports, Socialbakers’ CEO and co-founder Jan Rezab told VentureBeat.

“It’s very, very complicated,” he said, noting that his firm tracks over 180 metrics for social media.

Read more at Socialbakers bakes its data analytics down to a Social Health Index

Share your opinions with us in the comment box. Subscribe to get updates in your inbox.

Related articles

New Risks Jolt Commodities Supply Chain

Posted on by

The challenges facing the commodities sector have multiplied as corporations worry much more about compliance and reputational risks. Checking suppliers and, in turn their own suppliers, require new mechanisms and collaboration. Historically, large purchasers of raw materials worried foremost about price volatility and diversity of suppliers, either to meet financial projections or to avoid business interruptions.

Today, corporations must also worry that they are not unwitting participants in violating economic sanctions or tax fraud, or whether their goods are identified as coming from undesirable suppliers. Given the already complex nature of products, the impenetrable thickets of regulation and the threat from activists ready to lay siege via lawsuit or social media, these compliance and reputational risks add to a vastly increased burden faced by commodities firms.

“Clearly companies have a handle on financial risks, but if they’re operating in emerging markets they’re dealing with multiple issues,” says Mr Talib Dhanji, a partner at EY and leader of the firm’s commodities practice. “The key is to be on top of the different ways that people can commit fraud.”

Quality controls

Trading firms have a somewhat different set of risks from their industrial customers, because many firms do not take physical possession of the goods in question; they only trade futures and hedging instruments with other firms or customers. The frauds they might encounter, then, are more about unreliable promises than contaminated goods.

“Just because you get a nicely published document, that doesn’t mean it’s appropriate,” Mr Dhanji says. “You’ve got to have the right quality controls in place.” Trading firms are better positioned to put those controls in place, both because they face heavy oversight from the US and European regulators, and because the thin profit margins in commodities can mean severe financial pain if they fall victim to unscrupulous dealers.

A delivery that turns out not to meet specifications on quality, place of origin, or volume, for example, might mean a hedging instrument based on that shipment is invalid or insurers would not cover the loss. That threat tends to focus the trader’s mind.

Public scrutiny

Corporations that consume raw materials are in a more difficult spot. They are facing more public scrutiny and regulatory oversight than ever before, and many still do not have the right processes or structures to manage these new commodity risks effectively.

Compliance and reputation risks in the supply chain are different. Instead of a company looking horizontally to find more suppliers of materials, the company must look vertically down to its suppliers, and then their suppliers, and their suppliers, and so forth — all to be sure that no unwanted goods have infiltrated the supply chain at any point.

That requires new mechanisms to confirm the source of commodity goods, as well as new collaboration among treasury, risk, procurement, and compliance departments to do the task well.

Read more at New Risks Jolt Commodities Supply Chain

Subscribe us to get new articles in your inbox, and share your opinions in the comment box.