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

Demand Planning Manager

  • <500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k - R900K) excluding ...More

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
Description:A well-known retail organization is looking for an ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k - R800k including ...More

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist
https://careers.peopleclick.com/careerscp/client_gsk/external1931/gateway.dofunctionName=viewFromLink&jobPostId=359235&localeCode=en-us CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More