Effective risk management and due diligence should be the top priority for any top organization. Supply chain management has become crucial to companies’ overall risk management process. Supply chains are complex and long, and many third parties are involved.
A large supply chain means more risks ranging from legal, reputational, and regulatory to logistical and cybersecurity. To avoid supply chain disruptions, companies need to start due diligence and risk assessment for supply chains.
Luckily, you can get started with supply chain predictive analytics solutions. Using big data analytics in supply chain management and other key elements for the due diligence process will help you manage risks better and establish control measures. Visit PREDIK Data-Driven’s for advanced data analytics solutions for risk management.
Key Elements in Supply Chain Risk Management
The first step is to understand the key elements you need to consider for supply chain risk management and due diligence.
Knowing Your Partners
The starting point for supply chain management will be the partners. This can be an agent, distributor, or retail. You have to review their trade licenses. The next step would be to assess the risk related to having them as a partner. You can’t easily trace their public records, but they are necessary for deep investigation and learning about how you can benefit from this potential partnership.
You’ll have to submit some specific corporate documents to the state or government. You have to get these documents attested and legalized. Undertaking due diligence for supply chain management means you must know what’s written in documents or agreements you sign. If these documents are misused, it can become difficult to terminate them as it is a costly and time-consuming procedure.
You would also be signing commercial agreements with your supply chain partners. All parties providing services will be doing so under the applicable law. While this can protect your company from contractual risks, you won’t be protected from other risks.
For due diligence, you must make sure your third-party partners comply with it. There are many complex risks involved when you work with other parties. Have thorough scrutiny of their behavior or actions that directly impact your business.
For any services rendered, you would have to pay. Money laundering is always a risk, along with bribery or terrorist financing. Anything can impact your supply chain’s payment regime, so you must be lawful about any payments you make.
Trade risk covers all legal aspects of offering products in any market. You must ensure your supply chain complies with legal and regulatory restrictions from local suppliers to imports. Make sure you get pre-approvals before you import something.
Risk Assessment Tools
Various useful risk assessment tools are available to assist your company in supply chain management. With the help of technological advancements, these risk assessment tools can analyze the factors affecting any supply chain.
Artificial intelligence plays a huge role in effective due diligence. Big data analytics solutions can help compliance professionals, from analyzing documents to providing risk-level indications. The use of data analytics makes the process more efficient.
Supply Chain Mapping
Supply chain mapping is a process through which businesses can identify all direct/indirect suppliers and any participants in their supply chain. This would mean each contractor, sub-contractor, supplier, sub-supplier, shipping, recruiter, processor, distribution and logistics service provider, and labor broker would be included.
If a business doesn’t have a clear picture of all service providers and supply chain partners, it will make supply chain management and business operations complex and riskier. Hence, supply chain mapping software is essential for effectively mapping and mitigating the risks.
Supply chain mapping software also uses big data analytics, which helps with risk monitoring. It can improve your supply chain visibility, especially if it’s a multi-tier, complex supply chain. You can also gain insights into your competitor’s supply chain and use predictive analytics models to improve your relations with your partners.
This will help you minimize risk, understand supply chain partnerships better, and find areas that need more support. To improve ESG compliance, supply chain mapping software is a great risk assessment tool.
Risk Management Too
In today’s age, we can’t stress enough how important it is to protect your data, minimize risks, and comply with regulatory standards. You also must protect your intellectual and intangible property and tangible assets.
If anything is leaked on any supply chain end, that information can be used against your clients or your business itself. Risk management tools with asset protection solutions can help you manage, control, monitor, project, and review everything.
With the huge volumes of data companies gather daily, big data analytics solutions must be employed. You must develop models to sort through the data and identify the problem.
Next, you would have to solve the problems using appropriate data mining and management techniques. These techniques can help companies prevent risks and have mitigation plans in place.
You would also have to find facts and futures using various data analytics tools. They will help you investigate, understand, and manage your business and supply chain. This information can be obtained through online channels, financial statements, telephone calls, social audit reports, etc. Due diligence is carried out by you or any third party you hire.
PREDIK Data-Driven Can Help
Ready to improve supply chain management? A big data analytics company can help you with advanced data science solutions. Here’s where PREDIK Data-Driven’s expert team enters.
PREDIK Data-Driven provides advanced big data analytics solutions to companies across various industries in Latin America, Europe, Asia, and Africa. We offer big data-based research tools like predictive analytics models, customer analytics software, market intelligence software, asset protection solutions, and supply chain mapping software.
Our variety of data science solutions can accommodate business in several industries such as automotive, retail, food and beverage, healthcare, and banking & finance. Request a demo today.