Steps Involved in a Successful Supply Chain Risk Assessment Program
The purchasing department in an organization is one of the biggest cost centers involving large sums of money, multiple transactions, and numerous contracts. With such vast amounts of money involved, there is always a chance that someone would unethically or illegally try to take a share of the pie. As a result, fraud and corruption in the procurement function including dubious vendor relationships, illicit rebates, kickbacks, pilferage, and counterfeit goods are widespread across all organizations. Although it may not be possible to monitor all activities fully and eliminate such risks, procurement organizations can establish practices and protocols to decrease the incidence of such procurement irregularities.
Tips to Tackle Supply Chain Fraud
Use of Automated Invoicing
One of the most common supply chain fraud occurs during the invoicing process in the form of bid-rigging, bribery, collusion, and payments fraud. Since all particulars are manually entered, employees may have the motive to tamper with the exact details to make a small fortune for themselves. Such fraudulent invoicing can cost companies millions of dollars. Companies can leverage technology such as automated processing and invoice to eliminate such fraud. Automated processing and invoicing coupled with automated 3-way matching allows the system to verify that invoices match the purchase order and will flag invoices that do not have the corresponding order. Additionally, it can also create audit trails to highlight potential accounts payable fraud.
Using Asset Tracking System
An alternative kind of fraud that takes place within an organization is that of pilferage and employee theft. Such problems can be tackled using effective asset tracking including the use of barcodes and RFID tags. Such system will provide vital information regarding the location of the product and employee who handled the product last. This way, if any item or products are missing, the company can point out who is accountable for it. By tracking inventory across all points of the supply chain, companies can significantly minimize inventory shrinkage.
Develop a Fraud Response Plan
Many business owners feel that they have experienced employee theft or fraud. However, only a small majority of cases gets reported to the authorities, and companies even prefer to ignore such instances. This happens because such companies are not expecting incidences of supply chain fraud, and when they witness one, they are not well-prepared to deal with it. Having a robust fraud response plan and communicating it to the related stakeholders can minimize fraudulent activities and bring structure to organizational functioning.
Monitor the Procurement Process
If the attitude of the procurement department towards suppliers is lenient, then suppliers may become complacent and steer their focus away from quality. If the suppliers operate with little or no supervision, they might end up taking advantage of various schemes that can be contrary to the interests of the buyer including producing counterfeit goods, selling finished goods at lower prices, offering bribes, sub-contracting jobs, tax evasion, and producing a fraudulent financial statement. Performing and scheduling surprise inventory audits can reduce the opportunity for theft. Additionally, companies must also perform routine checks for product quality, non-delivery, repeat delivery, purchase orders, and actual deliveries to mitigate supply chain fraud.
For more information on supply chain fraud, bid-rigging, pilferage, kickbacks, and counterfeit goods:
Globally, the manufacturing industry is witnessing the entry of numerous new market players, and key stakeholders are looking for effective ways to curtail additional expenses related to supply chain activities to boost their profit margins. Also, due to globalization, outsourcing, and supply-base rationalization, leading businesses in the waste disposal equipment space have started looking for promising solutions to identify and mitigate supply chain risks. To understand and devise means to tackle supply chain challenges in the waste disposal equipment space, renowned businesses in the manufacturing industry are advocating the need for a robust risk management solution. Risk management helps businesses gain better visibility into the downstream and upstream operations and allows suppliers to curtail logistics costs.
To improve profitability and enhance the overall product quality, renowned businesses in the waste disposal equipment space are approaching companies like SpendEdge. SpendEdge’s risk management solution assists businesses to foresee potential issues in terms of cost volatility and material shortages and devise effective strategies to automate their supply chain process. Moreover, the risk management solution also assists companies to collect, analyze, and manage supplier information and mitigate supply chain disruptions.
The Procurement Pain Points and Insights Offered
A renowned waste disposal equipment manufacturer was facing certain predicaments understanding their supply chain structure and identifying flaws in their supply chain. The client wanted to gain better visibility into their supply chain process and devise potential ways to mitigate any disruptions in the space. With the help of SpendEdge’s risk management solution, the client wanted to identify the key performance indicators to save logistics costs and improve product quality.
With an aim to gain better visibility into the waste disposal equipment space, the risk management experts at SpendEdge tailored an integrated approach comprising of quantitative and qualitative data collection methodologies. Also, the experts further collated information across a wide array of proprietary sources to mitigate risks and streamline their supply chain activities.
With the help of the risk management solution offered by SpendEdge, the waste disposal equipment manufacturer was able to develop a risk mitigation strategy to meet the procurement standards of the company. The risk management solution also assisted the client in fulfilling the regulatory requirements and improving customer satisfaction.
Fundamental questions answered in this supply chain risk assessment include
The Business Outcome
The risk management solution offered by SpendEdge helped the client gain real-time insights on the production and delivery capabilities. The engagement also assisted the client to improve operational objectives while meeting the customers’ requirements.
To know more about our supply chain risk assessment for the manufacturing industry
The latest supplier market intelligence study by SpendEdge on the furniture market helps companies understand the suppliers’ functional and operational capabilities, supplier diversity, supplier positioning, and supplier selection and evaluation criteria.
Furniture market – an overview
The growing demand for modular and ergonomically designed products is boosting the sales revenue in the furniture market. The rapid rise in the interior decorating industry is driving the demand for comfortable and aesthetically appealing indoor and outdoor furniture. The increasing awareness regarding health issues arising from long working hours is resulting in the growth of the office furniture segment. Compact and modular office furniture is gaining immense popularity, and the leading suppliers are focusing on developing patented products and designs to meet consumer requirements. The dynamic shift towards furniture manufactured from eco-friendly materials such as a cane, recycled plastics, and wood is boosting environmental awareness and the need to meet sustainability goals. SpendEdge offers supplier market intelligence study that helps companies gain a better understanding of the category essentials such as risk analysis, service level agreement terms, and category sourcing evaluation. The team of experts also provides information on suppliers’ functional and operational capabilities, supplier diversity, supplier positioning, and supplier selection and evaluation criteria.
The best way to stay competitive in the furniture market is by offering products with innovative designs. The suppliers are tapping this new potential by providing modular interiors that occupy less space and an open atmosphere. The new designs help organizations promote openness and facilitate sharing of ideas among the workforce. Innovative furniture designs aids in saving office space and improve organizational workflow.
Multi-functional and versatile products
Suppliers are attracting more consumers by offering small and portable furniture that fit in confined spaces. This is a very niche market, and many leading vendors are developing products that suit this targeted market space. The rising demand for foldable, multi-purpose, and technology-driven furniture will fuel the growth of this market. Multi-use sofa, storage ottoman, hidden tables, and multi-functional storage units are some of the unique designs that are available in the current market.
Emergence of ergonomically designed furniture
Recent surveys suggest 60% of large and medium-sized organizations across the world have adopted ergonomically designed chairs. Ergonomically designed furniture alleviates the loss of productivity due to health-related issues and resolves various posture related issues. Ergonomically designed chairs have the highest demand in the office sector as it helps improve sitting postures by providing support in the right areas.
What solutions SpendEdge offer to businesses
The team of procurement experts at SpendEdge provide a supplier intelligence study that provides the current trends in the furniture and furnishings industry and the procurement best practices. The solutions offered includes:
- Offer information on the short-term and long-term growth prospects and rapidly shifting trends in the furniture manufacturing industry
- Provide insights on the supplier engagement models, key market insights, pros and cons about the pricing models, and key growth constraints
- Deliver information on procurement best practices; category spend analysis, latest market trends, key clients, drivers, and challenges in the furniture and furnishings industry
- Assess the key competitors’ operational and functional capabilities regarding residential and non-residential segmentation
Read our complete case study titled – Supplier Market Intelligence Engagement Helps a Global Furniture Manufacturer Understand Supplier Market Landscape
Other case studies you might be interested in:
- Category Intelligence Assessment Helps a Global IT Storage Company
- Supplier Market Intelligence Solutions for a Leading Office Supplies Company
- Procurement Market Intelligence Solutions Help a Leading IT Peripheral Company
For any queries, reach us at – email@example.com
The procurement process tends to involve many contracts and other important documents. These documents require signatures, and obtaining those can become costly and time-consuming. It also uses up a considerable amount of paper. Over half of organizations still use paper documents for contracts and order forms. Moreover, if you have a global supply chain, many of those organizations are in different parts of the world, requiring important documents to be flown around the globe and back again. Not only does this become a significant expense, but it also opens the document signing process to additional risk, as items can be lost or damaged in the process. It can also make it difficult to handle time-sensitive business. Digital signature can solve all such problems in the following way:
A different type of signature
Digital signatures and e-signatures both offer a solution to these problems. They allow documents to be signed legally without paper being mailed or participants traveling to another location. There are drawbacks, however. These types of signatures are not treated equally around the world. Different countries have different laws around their use, and what is acceptable in one may not be up to par in another. Additionally, not every organization or individual is willing to take on the risk of using them over a physical signature.
These issues mean that digital and e-signatures are not appropriate for every situation. Despite this, they can still be extremely useful. It is necessary to determine in which contexts they should be used and which situations require physical signatures, but even using them only for low-risk, routine agreements can significantly cut down on time and costs.
However, what exactly are digital signatures and e-signatures, and what is the difference between the two? Many people will use these terms interchangeably, but they are two very different things.
Digital signatures versus e-signatures
An e-signature is essentially a digital version of a physical signature, although it could be some other type of mark or even a sound file rather than simply a digitally drawn representation of the signer’s name. It is the electronic equivalent of signing one’s name on a physical piece of paper.
A digital signature, on the other hand, is electronic data embedded into a document that verifies an individual’s identity. Using a digital signature is effectively like adding a notarized signature to a paper document. The individual’s digital certificate is combined with the document to create a unique set of data. This method of signing has a high level of security and will show any tampering that is attempted after the fact. There are several different types of digital signature, and they may appear as a ribbon at the top of the document, a stamp, or a signature line. Alternatively, the digital signature may provide the requisite data and security without including a visible mark within the document.
While digital signatures are very secure and comply with the security regulations of many countries, they are not always considered legally binding in the same way that a physical signature is. In contrast, e-signatures are more often accepted in legal contexts but do not have the same robust certification as digital signatures. Because of this, it is sometimes advisable to include both types of signature on a document, especially if it is one of high importance.
The best way to implement digital or e-signatures will vary from company to company. Organizations with a low tolerance for risk may only want to use them for low-risk documents. Those operating internationally should familiarize themselves with the laws and regulations in the countries in which they are doing business, and be aware of which ones do not support this type of documentation. It is also important to consider the risk tolerance and preferences of the other parties signing the documents — sometimes it will be necessary to use physical signatures to satisfy everyone involved.
With the right research and implementation, these types of signatures can streamline business operations and result in significant savings. It is important to set up processes and rules for when and how digital signatures and e-signatures are used, but once this framework is in place, it can help smooth away many procurement challenges.
To know more on how digital signature and e-signature can streamline procurement, digital signature software, digital certificate, and digital signature algorithm:
Business Challenge: Lack of visibility of performance of key suppliers
One of our leading clients, a reputed automotive spare parts manufacturer was looking for a solution that could help them track their suppliers on a real-time basis and understand the risk levels associated with each supplier.
Situation: The client wanted to implement an early warning system that could help them foresee potential supplier specific risks
The automotive spare parts client had run into a few situations where they lacked visibility on the performance of suppliers, which led to supply chain disruption eventually resulting in issues with customer satisfaction. They wanted to implement an early warning system that could enable them foresee potential threats and implement appropriate mitigation strategies across the supply chain.
Approach: Built a web-based supplier risk assessment platform that provided on-going insights on key suppliers
We developed and implemented an on-going supplier risk monitoring solution that helped the category managers and buyers of the client to keep track of the activities of the supplier and foresee potential risks associated with them. The results were delivered through a web-based platform and hence the insights were made available for the stakeholders on a real-time basis. Risk alerts on suppliers were made available on a daily basis, allowing the client to stay updated on performance and risk levels for all critical suppliers.
Impact: Our web-based supplier risk assessment platform helped category managers stay on top of supplier stability and make timely decisions
The web-based platform provided easy access to real-time insights on critical suppliers, their current activities, impact of changing business and political landscape on the suppliers etc. The platform also provided alerts on the stability of suppliers and notifications on which suppliers are likely to face stability issues in the near future. The automotive spare parts client was able to effectively manage its supply base and avoided any potential supply chain disruption, thus ensuring customer satisfaction.