An important aspect of running a business is partnering with third parties, including suppliers, service providers and channel partners. “But no matter how advanced or diversified a company may be, it is impossible for any company to be an expert at everything,” PwC said in a report on monitoring vendor networks.
Organizations are learning the hard way that media exposure of illegal activities in a supply chain can reflect negatively on a company.
What’s more, many of the tools companies are using to monitor their supply chains are not adequate to identify compliance and reputation risks, such as vendors involved in trafficked labor, corruption and money-laundering. Those that investigate vendor corruption typically limit their approach to one-time visits or spot-checking primary vendors. But constant shifts in supply chains can make sampled data obsolete.
PwC recommends analytics-driven surveillance and reporting that compliments current processes to allow for continuous monitoring of the vendor pool. Frameworks that can help include: vendor identification, vendor verification that includes negative news reports, enhanced due diligence of vendor network affiliations, vendor risk-scoring and risk mitigation.