Supplier Risk Management

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.

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.

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.