The pressures on supply chains have never been greater. A recent study found that 90% of supply chain managers believe consumer demand is fluctuating more rapidly than five to 10 years ago, and just 15% believe their company is equipped to manage that seismic shift. A demanding consumer, scrutiny in traditional and social media, and complex global supply chains have heaped risk into the process of getting products to the warehouse, store and consumer, which must be addressed – the cost of not doing so can be impacted by problems ranging from product recall and wastage, through to serious breaches in compliance.
Reputational risk is therefore one of the hardest categories of risk for organisations to manage. The more complex and globally spread the supply chain, the more difficult it is to predict potential supplier failures unless a clear framework is in place for measuring and managing these threats. The challenge becomes even greater for global operators as a result of significant differences in both legislation and cultural expectations between regions.
Second party auditing & verification…
- Independent 2nd party auditing allows a business to adopt an ‘outside-in’ perspective on QSHE risk. It acts as a catalyst for greater transparency and accountability and helps bring to the fore the risks associated with supply chain interdependencies.
- Using an outsourcing model for auditing also adds flexibility, both in terms of seasonal peaks in activity and skill sets.
- Outsourced auditing bodies with global coverage allow local delivery, impacting positively on price and carbon footprint.