Supply chains, your customers are watching!



InformedCustomers.jpgWhat would be the point of business if it were not for customers? With the growth of technology and the rapid exchange of information, consumers are taking advantage of their role in commerce. They are becoming more informed, astute and prudent with their purchasing power now more than ever before. Their particular influence on supply chain was highlighted in the KPMG 2014 Top of Mind survey, which claimed that “customers are demanding end-to-end information. They want to know who produced their products, where they came from and what they are made of”.

The survey included feedback from 469 South African consumer executives, many of whom indicated that corporate strategic priorities were directed towards supply chain and related technology between 2014 and 2015.

What are the risks?

Among other issues relating to supply chain and vendor management, several examples in history highlight how important supplier integrity is to a business. In 2012, an American multinational technology company came under fire for sourcing products from a Chinese supplier that was allegedly operating its plant with safety and environmental violations.

The media and public scrutiny that followed was not good for business with activists threatening to boycott the global brand. As a tech leader, the reputation and success that the brand has been built on faced unnecessary risk that could have been avoided.


RudiKruger.jpg“Businesses run the risk of facing similar challenges and vulnerability when working with third party suppliers. Should these suppliers fail to operate legitimately, the repercussions could be a PR and operational disaster” says Rudi Kruger, General Manager at LexisNexis Risk Management.

Business cannot afford to lose public trust. To avoid it, your vendors and suppliers have to be legitimate, compliant and responsible,” added Kruger.

Procurement practices should therefore be facilitated to ensure that they always comply with acts such as the Public Financial Management Act, UK Bribery, Foreign Corrupt Practices Act and Companies Act (King III), and that they remain transparent and credible.

Technology leads the way

The KPMG survey also revealed that companies with “complex upstream supply chains face ongoing challenges related to sourcing, quality and traceability. As companies expand their global network, they are challenged to ensure that their suppliers, even beyond their immediate tiers, are adhering to required standards”.

“Internally vetting suppliers at this scale, can prove to be a timely and difficult process and outsourcing procurement vetting to agencies is often a costly affair,” notes Kruger.

As a result, utilising technological tools to support and streamline this process has never been more relevant.

“Our solution, ProcureCheck, is an online procurement vetting and management tool in South Africa and is designed to put businesses in the driver’s seat,” explained Kruger.

It assists with supplier due diligence as well as global and local legislation requirements and provides you with the information to make informed decisions, which can give businesses the competitive edge.

ProcureCheck helps you:

• Combat corruption by identifying potential connections and ownership of property.

• Identify possible fraudulent activity within vendors and employees with the help of South African Fraud Prevention Services.

• Recognise conflicts of interest within your organisation and potential supply chain partners.

• Investigate negative and positive news on vendors and employees to assist in mitigating reputational risk.

• Highlight business interests of employees within your organisation.

• Identify and prevent fraud schemes within procurement processes.

• Automate irregularity alert reports.

•Generate vendor and staff reports (useful for King III committees).

• Create your own internal vendor list (preferred and blacklisted vendor indicators).

•Import vendor and staff lists.

• Vet vendors (on an adhoc or batch basis).

• With ongoing monitoring.

• Generate detailed conflict of interest reports.

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