Storms such as Sandy remind us that supply risk never seems to drift too far from the sourcing manager’s mind.
And just as Sandy has wreaked havoc on America’s financial markets, we will soon begin to hear the stories of the storm’s impact on manufacturers up and down the East Coast.
Managing supply risk, whether introduced by Mother Nature, new governmental policies or other causes, requires a constant vigilance on the part of procurement organizations. Companies such as D&B have developed solutions to help buying organizations better screen and monitor customers and suppliers.
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For manufacturing organizations currently implementing conflict minerals/Dodd-Frank and other financial reform legislation, or needing to improve and increase compliance with anti-corruption regulations, “the only way to ensure compliance is to understand the entities you do business with…almost like a surveillance system,” said Kelvin Dickenson, D&B’s Vice President of Global Risk Management Solutions/New Business Development.
Companies need to ask and answer questions such as: Is my supplier sanctioned? Do I really understand the identity and behavior of the entities I do business with? How do I find out if my suppliers face any accusations of bribery?
“Today that data comes from manual and fragmented activities,” said Dickenson. “Instead we take a company’s supply base and screen it against the largest database of global adverse media information on organizations and individuals and identify and detect the risk, providing you alerts and source documentation to make your own decisions.”
That means a buying organization may need to distance itself from a particular supplier that may have already received a “certified” designation on behalf of the buying organization.
The ultimate decision-making rests with the buying organization, but given the range and breadth of regulatory and legislative requirements manufacturing organizations face, having access to a third party-aggregated database containing fraud warnings, fugitive lists, disciplinary actions, and regulatory lists among dozens of other pieces of data can aid the buying organization in compliance efforts.
Over the next few months, MetalMiner, in conjunction with D&B, will run several stories on supply risk management. Drop us a line if you have a story idea on this topic!