Compliance and integrity risk in the supply chain has never been more top-of-mind for the highest levels of organisational leadership. Reputational risk presented by a bad actor in the supply chain continues to drive the demand for quality business intelligence and robust yet efficient risk assessment processes that can scale to the size of modern supply chains.
Supplier Integrity® was born of the vision to bring together actionable business intelligence and an integrated set of capabilities to facilitate risk-based assessment and determine partner viability. Risk assessments can be extremely daunting when managing supply chains with tens of thousands of partners. Supplier Integrity® has shown to be a complete solution that enables an efficient and risk-based approach to protecting companies against regulatory action and reputational damage caused by bad suppliers.
As anticipated, Supplier Integrity® has enabled the firm to expand our footprint outside the traditional compliance and legal space to help vendor-management and procurement teams manage risks throughout their supply chains. As the recognition grows that supply chain partners cannot operate unchecked, we have become a leading voice in compliance and integrity risk education to these nontraditional business areas.
These discussions validated the platform’s direction and narrowed the 2019/20 focus to three areas designed to bring value and performance to our clients: enhanced risk scoring, expanded risk assessment tools, and an improved user experience for managing third party risks. While addressing these priorities, our comprehensive data foundation is extending to support scaled growth into real-time risk analytics.
Managed Services – the perfect complement to the Supplier Integrity®
Given the scale of work involved, the onboarding and ongoing monitoring of a supply chain of thousands of partners can be daunting for an already-stretched procurement team. Supported by our global research teams, we are able to augment our clients’ staff to onboard, monitor and renew supply chain partners in an efficient and highly-tailored way. This service complements Supplier Integrity® and is a cost-effective way for clients to quickly scale integrity programmes aimed at their vast supply chain networks.
The scope of a Managed Services engagement using Supplier Integrity® can be highly customised to the business needs of each client, but falls generally into managed screening and managed onboarding projects. Managed screening initiatives leverage The Red Flag Group®’s experienced global research teams to screen people and organisations through the IntegraWatch® | Compliance Screening solution for possible integrity and ethics issues. Managed onboarding is a more comprehensive scope, and also leverages our global research teams to perform some or all of the onboarding activities and assessments on behalf of the client.
Given the complementary nature of Supplier Integrity® and our compliance Managed Services offerings, we anticipate this complete solution approach to provide significant value to our clients in 2019/20 and beyond.
The Red Flag Group® market landscape assessment shows three trends for 2019/20 and beyond that stand out: risk assessment automation, increased emphasis on cyber security and data protection, and reducing the time between making a technology investment and seeing a return on that investment.
An overwhelming majority of prospective clients cite risk automation as a key factor in the successful implementation of their supply chain integrity programmes. The scale of the modern supply chain demands a light human touch while offering the benefits of risk visibility and insights. Clients are looking for solutions that reduce resource requirements and still provide effective risk protection.
Cyber security and data protection continue to be major topics among supply chain leaders. One of the biggest stories of 2018 was the European Union’s General Data Protection Regulation coming into effect. In the United States, the California Consumer Privacy Act is set to make just as big of an impact in 2020. While certain industries are at higher risk of experiencing data privacy issues, many organisations are struggling with how to manage data security and privacy across their entire supply chains. Data sharing is prolific in supporting the most basic business processes, and we see assessment of third party digital stewardship as a growing consideration in the third party onboarding process.
Vision for 2019/20
Our strategic direction for Supplier Integrity® remains consistent: to provide high-value business intelligence, enable risk assessment at scale, and streamline the implementation process. Supporting these areas, in 2019/20 we will focus on these key initiatives:
• enhanced risk ratings – while our Risk Analyser is continually being improved, this year we will be extending the dataset that is used for risk assessments and standardising indicators at a more granular risk level to give clients the flexibility to better align to their programme goals and enable future machine learning plugins to self-improve risk scoring over time
• third party data access – trusted third party data providers can deliver risk-specific details that are useful in the assessment and onboarding of a partner, so we will extend the data framework within Supplier Integrity® so that clients can order data from our network of trusted providers delivered directly to the platform.
At The Red Flag Group® we have never been more confident that the Supplier Integrity® platform is exactly what procurement and supply chain organisations need to properly assess, onboard and manage their third party partners. We are excited about the advancements delivered over the past year and have no doubt that the product strategy for 2019/20 will ensure our prominence in the third party risk-management landscape.