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Supplier Risk Management

Anticipate and respond to supply chain risks at speed and scale

Organizations have historically focused supply chain investments around a “just-in-time” philosophy. But in today’s global marketplace, with increasingly complex supply networks and risks that need to be mitigated and managed, organizations that develop both resilience and agility are best suited for success. Deloitte’s Supplier Risk Management solutions can help organizations gain better supply chain visibility and effectively counter disruptions.

Driving supply assurance in a risky world

For procurement leaders, the pursuit of cost savings is often thwarted by supplier risks that can proliferate along the way. Between global public health crises, economic uncertainty, geopolitical conflicts, and natural disasters, supply chain disruptions have a real impact on the bottom line. To minimize losses, supply chain leaders must take steps to build capabilities that can help their organizations anticipate, sense, and respond to unexpected changes. To maximize gains, they must build connected, digital supply networks that can evolve alongside shifting business priorities.

But many organizations have a long way to go when it comes to proactively managing supplier risk. In our 2021 Chief Procurement Officer (CPO) Survey, enhancing risk management was only the sixth highest priority for responding CPOs—a measure that’s barely changed since 2019. On top of that, the reported supply chain challenges from 2020 were substantial:

  • 70% of CPOs said they have good visibility into their direct supplier base
  • 52% said they are not using supplier risk management tools for supplier collaboration
  • 26% were able to confidently predict risks within that direct supplier base
  • 15% had visibility to tier 2 and beyond

Many organizations desire multitier supply chain visibility, but face challenges in achieving true transparency into their immediate first-tier suppliers. They often struggle to answer questions such as these:

  • Where are the critical nodes and commodities?
  • Are all suppliers financially solvent?
  • Is the enterprise diversified enough to withstand shocks to the supply network?

The key to gaining a more comprehensive view of supplier risks relies on interconnected digital tools, physical infrastructure, and corresponding data streams. Trustworthy data can help provide better supply chain visibility and help leaders identify risk exposure. With this foresight, organizations can proactively respond to emerging threats in an effective, cost-friendly manner.

Supplier Risk Management

Building supply network resilience and agility with data, tools, and technology

Deloitte’s Supplier Risk Management solutions can help your organization build more trustworthy supply chain data and establish the full picture of your potential supply chain risks. Through a combination of our technological assets and a deep understanding of both supply chains and industry trends, we can help model supplier networks, sense risks in real time, and take prescriptive actions based on simulated outcomes. Successfully managing risks across modern supply chains requires organizations to:

Our approach includes:

  • Ecosystem accelerators: We bring numerous assets and accelerators to enhance and expedite the collection, integration, harmonization, and analysis of data from both internal and external sources, including millions of supplier records, thousands of third-party data sources, and data management and system integration alliances
  • Conceptual architecture: Bespoke architecture using technology components based on your unique business requirements and technology strategy
  • Data collection: Proprietary frameworks, methodologies, models, and solutions that draw from internal and external data sources
  • Decision support and accelerators: Prebuilt, proprietary solutions and leading-class third-party technologies that permit advanced analytics, data visualization, and external collaboration

Leveraging leading-edge technology to enhance efficiency, effectiveness, and speed throughout the architecture, we help you chart a proven path forward. Our supply chain risk management maturity models enable you to reach best-in-class architecture that permits supply chain visibility and agile risk management.

Why Deloitte?

With supply chain risk management engagements for some of the world’s largest and most complex enterprises, we know what best-in-class looks like and how to take you there. With mastery in technology implementation and supply chains, we can help you avoid potential pitfalls in transformation, seize opportunities, and quickly mature your organization’s supplier risk management capabilities.

Team: Global organizations need global capacity. With more than 3,000 dedicated supply chain professionals solving complex supply chain issues in more than 150 countries, our talent model revolves around teams that bridge the gap between traditional business and supply chain issues with cutting-edge data science and technology. Our Risk Advisory services and cross-industry experience also enable us to help you enhance your supplier risk management capacity.
Advanced analytics: We use cognitive technologies like AI to mine data, sense risks as they emerge, and identify the specific threats and opportunities that matter most to your business. Aligning with your enterprise technology strategies, we can help you fine-tune algorithms, deploy AI solutions, and manage cognitive tools over the course of the engagement.
Assets and accelerators: We apply smart agents and supplier risk management tools (e.g., Illuminate, CentralSight, Cognitive Risk Sensing, Control Tower, Supplier 360, and TrueView) to transform your capabilities around cleansing and compiling data, offloading and integrating applications, and implementing collaborative platforms in a way that maximizes efficiency and minimizes risk.
Ecosystems and alliances: We’ve assembled a robust roster of alliances, assets, eminence, market offerings, and leaders across the end-to-end supply chain. Our accolades span the full breadth of our alliance relationships.
Data repository: We can expand your risk awareness and insight by drawing from robust internal data sets and intellectual property (e.g., risk taxonomy, KPI library, and prebuilt maturity models), as well as more than 1,200 third-party data sources. Relying on our industry and domain excellence, we can help reveal the holistic picture of your risk profile and deliver insights that drive strategic mitigation and end-to-end supplier visibility.
Speed and scale: Our ready-to-configure assets can be deployed in weeks, not months. Given our cross-industry domain capabilities in supply chain and technology, we have the unique capacity to consider complex supplier risk challenges and use digital tools to drive sustainable solutions. And with our global footprint, we can jump-start your supplier risk management transformation across any geography or business complexity.
Change management: People and processes are just as important as the technology behind them. We bring a deep understanding of how to drive change management, end-user adoption, and process transformation. Plus, our alliances with technology solution leaders allow us to integrate multiple internal systems and connect to suppliers, fostering more collaboration and end-to-end visibility across your supply chain.

A global leader in building operational resilience and agility

  • A leader in Data and Analytics Service Providers, Magic Quadrant, 2021 by Gartner1
  • A leader in Enterprise Insights Service Providers, Q2 2020 in The Forrester Wave™2
  • A global leader in Procurement Operations Consulting, 2020 by ALM Intelligence3
  • A global leader in Business Analytics Consulting and Systems Integration Services, 2020 by IDC4
  • A global leader in Cybersecurity Consulting, 2019 by ALM5

Supplier Risk Management offerings in action

Real-time transportation hazard monitoring

The challenge: A global consumer products company was facing many weather-related transportation disruptions and had limited visibility into manufacturing, distribution, and customer locations affected by significant weather events.

The approach: We created a GIS-based dashboard that graphically displays environmental hazards along select client locations and monitors real-time weather warnings and advisories along transportation routes. We then mapped the client’s routes, locations, and environmental hazard threshold to predict potential route hazards. The solution also alerts users when select weather triggers or thresholds are met or exceeded along a route.

The result: With data-driven insights, the business was able to predict potential route hazards 10 days before they emerged and alert clients to any potential disruptions. This foresight improved the timeliness and safety of product delivery, reduced losses and delays due to weather events, and enabled an estimated reduction in annual force majeure losses of $8.9 million.

Holistic supplier risk segmentation solution

The challenge: A global automotive OEM needed help gaining more supply chain visibility and a real-time view of potential risks. The organization had limited visibility into commodities or suppliers, leaving room for a larger risk profile. Historically, the company relied on reactive, decentralized measures to address supplier risk and used relatively unsophisticated analytics to identify supplier risk.

The approach: Combining our experience with the client’s priorities, we identified the company’s key risk dimensions, evaluated internal and external data sources, created an analytical model to prioritize commodity-supplier combinations based on risk, and developed visualization and drilldown capabilities for intuitive stakeholder consumption.

The result: We prioritized more than 6,000 commodity-supplier combinations into an actionable subset of high-risk pairs and created a risk mitigation playbook that enabled targeted action to address identified risk drivers. The collaboration ultimately helped the OEM shift from reactive to proactive management of supplier risk.

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Ready to make it happen?

We know how to quickly take you to a state where risk is actively managed, opportunities are seized, and supply is assured. Reach out today to discuss your vision for building more resilient, agile supply networks.

Endnotes

1 Jorgen Heizenberg, Twiggy Lo, Gareth Herschel, Divya Radhakrishnan and Shubhangi Vashisth, “Magic Quadrant for Data and Analytics
Service Providers,” Gartner, February 15, 2020.
2 Jennifer Belissent, “Forrester Wave™: Enterprise Insights Service Providers Q2 2020,” Forrester Research, June 8, 2020.
3 ALM Intelligence, “Procurement Operations Consulting 2020”; ALM Intelligence estimates © 2020 ALM Media Properties, LLC.
Reproduced under license.
4 Jennifer Hamel, “Worldwide Business Analytics Consulting and Systems Integration Services 2020 Vendor Assessment,” IDC
MarketScape, June 2020.
5 ALM Intelligence: “Cybersecurity Consulting 2019”; ALM Intelligence estimates © 2019 ALM Media Properties, LLC. Reproduced
under license.

Get in touch

Siddharth Patil

Siddharth Patil

Principal | Deloitte Consulting LLP

Sid is a principal in the Supply Chain practice of Deloitte Consulting LLP. He co-founded and helped stand up the Deloitte’s US Supply Chain Analytics practice in 2012. He helps solve his clients’ mos... More

Jim Kilpatrick

Jim Kilpatrick

Canadian Consumer Products Industry Leader

Jim is the Global Supply Chain & Network Operations Leader for Deloitte Consulting, and the leader for Consumer Products Industry in Canada. With over 25 year of experience in Deloitte, Jim has held m... More

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