Supply Chain Forensic Services

The issue

The quest for enterprise growth and profitability can create persistent pressure upon companies to do more with less. As a result, many organizations are increasingly relying upon relationships with third-party vendors. These relationships have become progressively more complex as companies engage in more cross-border relationships.

A company’s scrutiny of its supply chain relationships is particularly important in an era when both US and foreign authorities are aggressively monitoring and enforcing anti-corruption laws. Failure to adequately and actively monitor supply chain relationships can substantially increase a company’s risk of significant financial losses, as well as exposure to legal and regulatory investigations, civil and criminal litigation, and reputational damage.​

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Our solution

Deloitte’s Supply Chain Forensic Services can help you establish or refine a highly effective supply chain risk monitoring and management program. With our relevant experience across a variety of industries, we can help you address the risks associated with third-party relationships and the potential damaging effects of fraud, waste and abuse.

Our approach not only focuses on compliance with regulatory requirements and industry standards, but it also seeks ways to recover overpayments and other sources of profit leakage across your supply chain — money that can help improve profit margins and bottom-line performance. Traditional approaches often focus primarily on structured data analysis, such as transactional accounts payable information. However, we reach beyond that by leveraging advanced text analytics and data mining techniques to uncover a wealth of information in unstructured data sources, such as invoices, emails and other supporting documentation. By using an integrated dataset, including both structured and unstructured data, we can apply rules-based, inductive and visual techniques to help clients identify potential indications of schemes or scenarios and develop models that depict or describe historical events.

Examples of typical work steps performed in conjunction with the client in a Supply Chain Forensic Services engagement include:

• Performing diligence and vendor risk analysis to identify possible related entities and areas of increased susceptibility to fraud
• Gaining a better understanding of vendors’ operations, accounting controls and financial reporting environment
• Conducting data mining and analytics procedures aimed at detecting and quantifying potential overspending in typical high-risk categories, such as labor, allocated or shared expenses, cost-plus transactions and third-party pass-throughs
• Assisting in the recovery of losses due to internal or external supply chain fraud
• Assisting in the development of processes and procedures for reducing the risk of profit leakage, fraud, waste, or abuse
• Assisting in implementing systems to help strengthen vendor relationships in an effort to reduce the likelihood and cost of litigation

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