Everyone should see a doctor for a check-up, even the largest and most far-reaching companies. Today, Tom talks with Brian Alster, the Global Head of Compliance & Supply Products at Dun & Bradstreet, about their new, innovative technique called the supply chain health check.
- Daily, large-scale, geopolitical change has become the new normal and all kinds of organizations need to become more agile to keep up. Tom asks Brian about how the supply chain health check can and should be used in the context of an ever-changing landscape.
- Due to intensifying globalization, today’s supply chains are criss-crossing borders daily. Layered with political instability, this brings on new risks for these supply chains.
- Process, process, process! One of the best ways to mitigate risk proactively is to perform continual health checks on the supply chain process.
- There are two key elements to implementing these health checks:
- Your company needs the culture to execute consistently.
- You’ll also need established policies to dictate the check-up process.
- From the corporate compliance perspective, what might a compliance professional, supply chain expert, or lawyer do to execute a supply chain health check? Brian takes Tom through the four main steps of performing a health check:
- Diversity: If you’re working with a diverse range of suppliers from various geographies, you’ll be prepared to pivot quickly in times of disruption. You’ll be able to efficiently weather events like natural disasters, regional sanctions, or political insecurity. How quickly you can pivot your supply chain will dictate how quickly you can get back up and running – and how effectively you can minimize losses.
- Visibility: Using the right tools that employ data and analytics will help you understand and vet who you’re doing business with. From parent companies and subsidiaries down to the smaller organizations they are tied to, having a broad and deep visibility into the supply base can help you stay proactive instead of reactive when assessing potential risks across multiple dimensions of the chain.
- Onboarding: Building out an efficient onboarding process that validates vendors early in the process can save you time, money and resources. Brian gives us an example: to smooth out the process, create a simple, online portal for third-party suppliers that hosts a dynamic and multilingual online questionnaire. Using this data, you can beef up the vetting process of your suppliers, enrich your records of the organization, and create a preliminary risk assessment.
- Monitoring: Continual monitoring of your supplier will enable you to reassess your relationship with them at any time. This proactive approach will help your organization ensure business continuity, stay on top of compliance, prevent financial waste, and avoid production shortfalls. Setting up an alert system – as opposed to a timed report – will help keep you in the know if something has changed in the risk profile. This approach enables you to re-certify, continue business as usual, or offboard a supplier, all within a shorter window of time.
- While this health check is centered on the supply chain, can these steps be used by compliance professionals and lawyers or in other corporate contexts, such as internal audit? Brian talks about the effectiveness of the health check in a variety of situations.
- As the worlds of compliance and third-party procurement begin to merge, innovation and automation can no longer afford to be used as stop-gaps. In response, the health check isn’t just an innovative technique but a high-level approach to maximizing efficiency across various departments, especially within the broad context of rolling global disruptions.
If you’re a compliance professional looking for a convenient and effective way to fulfill your continuing education requirements, go to FCPAComplianceReport.com/Courses and choose from 4, hour-long training packages that will keep you up-to-date with the latest developments in the compliance field.