How well do you know your suppliers? Better than they know you?

| 0 Comments

 

DueDiligence.pngWe all have suppliers - some organisations have just a few, making supplier management quite easy, where others have thousands to keep track of. However, even when using a regimented supplier management system, how well can you know your supplier?


Judy Bonnier, corporate governance, risk and compliance solutions specialist and Business Development Manager at LexisNexis Risk Management and IOS Solutions, tells SmartProcurement that there are many things you should consider when getting to know your suppliers.


“Get a 360-degree view of organisations and individuals by digging deeper than a financial stress score.” A starting point is using Google Earth to confirm if your supplier is who they claim to be and indeed have that fancy factory or store they are telling you about. A simple search would allow you to closely view the actual satellite image (showing building size and actual location) to confirm if the organisation is truly what it presents itself to be.


The next step is to understand the complex relationships and connections that may exist between your suppliers and other entities.


Many organisations take for granted the implications of a simple connection between one of their employees and a supplier’s director, especially if the employee’s duties involve supplier take-on and purchasing. Is the financial risk really worth it? Not to mention the possible reputation risk if the company is found to be operating under such corrupt activities?


“Customise your due diligence efforts to suit each client and what they are spending with you”: using a consistent and defensible due diligence process when choosing new suppliers could enable the detection of conflicts of interest, pass-through schemes, tender fraud and shell-company schemes before they prove costly to your organisation.


Laws such as the PFMA, MFMA, King III and the UK Bribery Act require subjected organisations to comply with vendor and employee vetting, or face legal penalties, costs and reputational damages associated with unethical business partners.


Bonnier suggests some additional simple searches that will help you better understand your suppliers:

•  Use a global news archive to check a supplier against licensed news sources and minimise the reputational risk of conducting business with an unethical vendor.
•  Checking sanctions, watch lists, and PEPs ensures that your organisation does not work with a blacklisted supplier, which would put you at risk of costly fines.
•  Company information - Verify a corporate entity and find out more about its business and management structure, financial health, and M&A activity.
•  Country information - Identify high-risk issues in the supplier’s country of origin, by accessing on-the-ground media reports and in-depth country risk analysis reports.
•  Legal history - Determine how litigious the supplier and its employees are, or whether they are involved in ongoing litigation that could disrupt business effectiveness.
•  Public records - including names, addresses, places of employment, cellular and unpublished phone numbers, licences, property records, bankruptcies, liens or judgments, all of which could provide insight into an organisation’s past dealings.


Do not underestimate the importance of a proper due diligence process in your procurement activities. Be proactive about vendor and employee vetting before any damage can be done to your organisation’s reputation.


For more information on vendor and employee vetting email Lexis Nexis Risk Management on procurecheck@lexisnexis.co.za.

Image: woodyafterhours.com

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Purchasing and Supply Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supply Chain
Purchasing and Supply ManagerThe CSIR has a vacancy ...More

Senior Manager Public Sector

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 Senior Manager Public SectorTotal Cost to Company: R1.1mil ...More

Senior Manager: Mining

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
Senior Manager: MiningTotal Cost to Company: R900k – ...More

SUPPLY CHAIN MANAGER

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
SUPPLY CHAIN MANAGER(Total Cost to Company R750k – ...More

Master Data Management Advisor

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 MASTER DATA MANAGEMENT ADVISOR(Total Cost to Company R750k ...More

PRO - Performance Reporting

  • >500 000 Permanent Procurement Consultant Procurement Management Projects / Category Management
PRO - Performance ReportingTotal Cost to Company: R800k ...More

PRO - Risk & Governance

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
PRO - Risk & GovernanceTotal Cost to Company: ...More

Supply Chain Site Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Supply Chain Site ManagerTotal Cost to Company R1mil ...More

Chief Financial Officer

  • >500 000 Gauteng Permanent Procurement Officer / Specialist
Chief Financial OfficerTotal Cost to Company R1.5mil – ...More

Process Engineer- WMS

  • <500 000 >500 000 Industrial Engineer Permanent Projects / Category Management Western Cape
Process Engineer- WMS(Total Cost to Company R350K – ...More

Forecast Analyst

  • <500 000 Analyst Permanent Procurement Management Western Cape
Forecast Analyst(Total Cost to Company R350K – R500K) Location: ...More

Group Category Manager: Indirects

  • >500 000 Permanent Procurement Management Projects / Category Management Western Cape
Group Category Manager: Indirects(Total Cost to Company R700K ...More

Group Category Specialist: Chemical

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Group Category Specialist: Chemical(Total Cost to Company R700K ...More

Sourcing Specialist - 3rd party

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Sourcing Specialist - 3rd partyTotal Cost to Company ...More

Global Procurement Lead (Processing)

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
 Global Procurement Lead (Processing)Location: JohannesburgTotal Cost to Company ...More

Global Supplier Performance Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Global Supplier Performance Manager Location: Johannesburg  Cost to ...More

Group Customer Service Lead

  • <500 000 >500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
Group Customer Service Lead  Location: Johannesburg As the ...More

Business Intelligence Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supplier / Business Development
Business Intelligence Manager Location: JohannesburgLead the development, implementation, optimization ...More

Group Procurement Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management
Group Procurement Manager Location: Johannesburg  A Global Organization ...More

Commodity Manager Packaging

  • >500 000 Commodities Gauteng Permanent Projects / Category Management
Commodity Manager Packaging  Location: Johannesburg Salary: R850k– R1.1mil ...More