Ted Datta Channel Director – Risk Solutions
BvD UK & Ireland
Enhanced Supplier Due Diligence
The implications for sourcing and supplier risk management
‘It takes 20 years to build a reputation and five minutes to
ruin it. If you think about that, you'll do things differently.’
-Warren Buffett
Why now?
Global data and supplier risk models
A recent case study
UK Government: Corporate Transparency
http://www.supplymanagement.com/news/2015/uk-government-spending-could-be-battering-ram-for-greater-corporate-transparency
European Union: Anti-Money Laundering
http://www.pwc.lu/en/anti-money-laundering/publication-of-the-4-th-aml-directive.html
Modern Slavery: Know Your Suppliers
https://www.gov.uk/government/news/pm-seeks-stronger-co-operation-with-vietnam-to-stop-modern-slavery-as-new-measures-come-into-force
http://www.theguardian.com/world/2015/aug/10/lithuanian-migrants-chicken-catchers-trafficked-uk-egg-farms-sue-worst-gangmaster-ever
Routine Pre-Qualification?
Enhanced Due Diligence
.
Source: Orbis report 12/08/15http://www.bbc.co.uk/news/world-europe-26672800
Harmonising global market intelligence
How global is Global?
Bureau van Dijk: Global Corporate Coverage (2015)*
*Source: Orbis global coverage 10/08/15
What about emerging markets?
2010 2011 2012 2013 2014 20150
2000000400000060000008000000
100000001200000014000000160000001800000020000000
2010 2011 2012 2013 2014 20150
2000000
4000000
6000000
8000000
10000000
12000000
14000000
2010 2011 2012 2013 2014 20150
200000
400000
600000
800000
1000000
1200000
1400000
2010 2011 2012 2013 2014 20150
500000
1000000
1500000
2000000
2500000
3000000
>18.5 million companies* >12.5 million companies*
>1.2 million companies* >2.6 million companies*
*Source: Orbis global coverage 10/08/15
Market
Intelligence
Supplier Risk Profile
Introducing supplier risk models....
Adverse Media
Sector
Business Age
Owners & Directors
Country Risk &
Sanctions
FinancialStrength
De-risking a global supply chain against the clock
Recent Case Study – Large Global Corporate
Background
Strong brand, multi-national, manufacturer and retailer
70 countries world-wide, reliance on emerging markets
“What is a Sanction?”
Banking license, new covenants: Supplier Sanctions Checks
The Catalyst
Who was involved?
Many stakeholders – HR, Treasury, Legal, Finance, Compliance
....buck stops with Procurement!
First Steps
Supplier information audit – who? where? what? when?
Data matching exercise
Model Development and Application
Is it fit for purpose... “risk based approach”
Outcome
Simple, scalable, supplier risk model
What’s next...?
...blend Internal Data with the model:
- contract value
- sole sourced vs. dual sourced
- contract lifespan
- consequences of failure
Three Key Takeaways
Increasing regulatory pressure to Know Your Suppliers
Availability of global data is improving in key markets
Get set for a collaborative approach!
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