3rdRisk in Action

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3rdRisk in Action

Why you need Smart Technology to Manage your Third Party Risks

70% of firms do not have complete transparency and oversight of the risks in their supply chains. Only with a smart, technology-enabled approach you can manage your supply chain risk in a responsible way.

Real life example: A cyber- attack at a supplier can cause major issues

In Spring 2021, a major food retailer was unable to deliver food products to its customers, leading to an incumbent financial loss. It happened when the organization’s service provider disrupted deliveries nation-wide: the firm was victim of a ransomware attack that made it impossible to supply supermarkets with food products for several days. Not long after, 500 grocery stores had to shut down, due to a massive cyber-attack affecting their point-of-sale systems (POS). The retailer was not able to receive card payments and the stores had to close for several hours.

The stakes are rising, for organizations and the whole world

When incidents occur in the supply chain, the effects can cascade down: that's why retailers need to determine whether their third parties have sufficient security measures in place. However, 70% of Dutch firms do not have sufficient visibility on this.

Supply chains are becoming more integrated and co-dependent. At the same time, regulatory pressure is rising, as governments and consumers expect more sustainable practices. Your firm's material supplier may be found to have heavily negative environmental impacts, leading to fines; or it could be found to have unacceptable working conditions, leading to consumer boycotts. The stakes are high, with risks of operational disruption, reputational loss, and deflated equity valuations. The good news is that there are ways in which businesses can increase the transparency of their supply chain and mitigate risks in time.

What is 3rdRisk?

Excel is not the solution

Most firms acknowledge the risks arising through their supply chain, yet have limited capabilities to detect and respond to them. Often multiple departments that require insights from suppliers are working in silos and might reach out to the same supplier for different requests. This results in a major workload on both sides, and limited insights. Firms that engage their suppliers to provide evidence of business processes and controls often use excel questionnaires and emails. This way of working is error prone, inefficient and does not provide sufficient transparency.

A responsible supply chain

Organizations need continuous insights into risks arising through their supply chain, without having to mobilize a major workforce in order to do so. This requires a smart, technology enabled approach. Deloitte’s Responsible Value chain team supports organizations to bring this transparency in an efficient way. We engage with technology vendors in the market that enable deep transparency and automation.

A key capability we bring is 3rdRisk, a collaborative platform where organizations can share information and obtain transparency in the supply chains they form together. It offers a singular, centralized view of third parties, where emerging risks are detected and handled in a timely manner.

Are you interested in learning more about our offerings? Do reach out to us to start a conversation.

Get in Touch.

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