As a connected set of companies that form the link between individual component sources and a final product, the supply chain bridges the gap between suppliers and the ultimate end user. When it works, it is an impressive orchestration of many moving parts working in concert to deliver products to customers. But what happens when a critical link in the chain fails due to business disruption, natural disaster, financial issues, or a problem within its own supply chain?
In today’s globalized economy, companies’ supply chains are growing bigger and more complex. While these business relationships can deliver gains in productivity and profitability, they can come at the price of taking on additional risk exposure.
Third-party risk management is the fastest growing governance, risk, and compliance (GRC) technology market and cited as most challenging aspect of a compliance program [Deloitte-Compliance Week 2015 Compliance Trends Report]. In fact, 77 percent of manufacturing firms report increasing supply chain complexity as the fastest growing risk in business continuity.
Organizations are looking to technology to help ensure supply chain resilience, with a fierce focus on protecting their organization’s brand, reputation, assets, and data.
Big supply chains call for big data
Supply chain executives are placing great store in the potential of big data. In fact, an SCM Chief Supply Chain Officer Report showed that they believe big data analytics to be more valuable than the Internet of Things, cloud computing, and 3D printing. More manufacturing firms are adopting big data strategies to tackle a wide range of risk factors within the supply chain, including, minimizing risk within a global supply chain and managing supplier performance.
Tip – Choose a big data analytics solution that is meant for business users and analysts who want an easy, fast way to access, blend, explore, and analyze data quickly without depending on IT or data experts, such as OpenText™ Big Data Analytics.
You’re a good corporate citizen. Are your suppliers too?
It has been well established that having a clear, effective corporate social responsibility (CSR) program is good for business. Many customers seek out and want to do business with vendors who share their values and compliance culture. For example, by demonstrating that a company’s supply chain is conflict-free, it will reassure stakeholders that the company is compliant and will engender trust among suppliers, consumers, and others.
The SEC Dodd-Frank Act, Conflict Minerals rules, and the EU REACH mandate and ROHS Directive are just a few regulations forcing companies to take a hard look at their supplier ecosystems. However, compliance is threatened when suppliers fail to provide needed information.
Only 22 percent of companies required to file conflict minerals reports by a June 2014 deadline did so – most stating that their supply chains were too complex, or that suppliers did not respond to questionnaires or did not provide complete or adequate responses. Further, since mandatory reporting in 2014, more than 70 percent of U.S. companies say they still cannot make a determination that their supply chains are free from conflict minerals.
Tip – Firms are turning to sophisticated information exchange solutions for supplier self-assessment to ensure compliance in areas such as conflict minerals, anti-slavery, and sustainability, such as OpenText’s Conflict Minerals Reporting solution.
Managing risk begins with onboarding process
Given the vast amount of supplier data that exists across the enterprise, technology offers an easy way to import, structure, organize, and consolidate this data in one place, and then map it to the associated supplier risks, regulations, controls, locations, and products for better visibility. And a successful supplier information management program starts with the right supplier onboarding process.
Tip – For B2B suppliers who use a defined EDI format to send and receive data, these suppliers easily buy into an onboarding system which uses a format they already use (typically high volume and large suppliers), such as OpenText™ B2B Managed Services.
When it comes to supply chain disruptions, it is no longer a matter of “if” it will happen, but “when” the next incident will occur. Choosing a proactive approach and the right technology solutions will only improve your organization’s ability to mitigate, adapt, and respond quickly to threats as they arise – thus strengthening resilience in your supply chain.