Future-Proofing the Supply Chain in 2022

While much of the world is rebounding from the COVID-19 crisis’ economic downturn, global supply chains are facing continuing pressures from changes in consumption patterns, surging demand for goods, shortages of workers, and pre-existing political pressures.

The global hard-stop triggered by COVID-19 and its associated restrictions proved a difficult operating environment for the corporate sector and the global restart has not been without its challenges. Clearly, the direction of travel has been positive, with vaccines easing health risks and a barrage of fiscal and monetary policy helping companies avoid drastic labor cuts, providing supportive financing conditions, and boosting revenues.

When it comes to future-proofing supply chains in 2022 organizations are facing numerous challenges. For example, the ability of a supply chain to continue to delivery even when under stress, or its resilience, is becoming increasingly important. There are both internal and external elements to supply chain resilience. Examples of internal factors include financial health of an organization, where it’s located in the world, and its different levels of risk and control standards. External factors include events like war, the pandemic and third-party actions, such as cyberattacks expose these internal vulnerabilities.

When Supply Chains are not resilient and failure occurs, clients generally don’t care if delays were caused by a supplier. If you are unable to deliver your obligations to a customer, or you don’t handle a customer’s data in the appropriate way due to a supplier issue, your organization will be held accountable.

Transparency in an organization’s supply chain adds value.

Investor sentiment will react very quickly based on the perceived control an organization has on its supply chain. For example, talking in a positive way about sustainability and how they’re investing to increase diversity in their supply chains, can increase value. On the reverse, when a story breaks about a supply chain breach or a failure to deliver on client commitments,  it can result in a significant reduction in the value of an organization.

Where to invest now to help maintain a competitive advantage.

Investment is critical. Standing still in this space isn’t an option. There are four key focus areas where companies should be investing:

1. Talent. Having the right people is crucial. This is a complex space and you need experts.
2. Technology. The days of being able to manage supply chains on spreadsheets and paper are long gone. You need a purpose-built dedicated technology solution.
3. Data. You need to be able to identify the right data signals and data points that truly help you understand your supply chain.
4. Validation and assurance. This includes doing a deep dive into the suppliers that you think are critical and high-risk and making sure that they are living up to their obligations and have the right controls in place

Where S&P Global’s Know Your Third Party (KY3P®) can help.

Third-party solutions and vendor relationships are under increasing scrutiny from regulators, the media, and consumers. As firms increase reliance on third-party vendors to deliver business-critical processes and services, oversight complexity also increases.

At S&P Global we partner with our customers to ensure that they are managing their supply chain risk effectively. We work with our global community of end-users to realize best-in-class third-party risk management programs. Our solutions and services drive efficiency, streamline due diligence, and deliver transparency across their organizations.

KY3P is an integrated suite of solutions to manage end-to-end third-party and vendor risk management. Through a combination of robust technology and workflow solutions integrated with our data signals, our in-house experts are on hand to help customers make the right decisions at the right time and continue to monitor supply chain risk for the long term, covering:

• Onboarding and Oversight: standardized onboarding, due diligence, inherent risk calculation, oversight, and off-boarding of third-party products, services, and outsourcing arrangements. This enables the enforcement of compliance by codifying the organizations’ vendor risk policies and oversight procedures.
• Due Diligence and Monitoring: helping firms collect and maintain risk information, including cybersecurity and financial ratings, sanctions data, news alerts, cyber event data, and questionnaire responses from third parties that can be used to generate risk scores and drive remediation.
• Shared Assessments: delivering services and software for third-party risk assessments. We offer standardized, cost-effective on-site, desktop, or express assessments by accredited partners based on market standard criteria delivered through the KY3P platform.

Today, the sheer scale of pandemic-related disruption and altered consumption patterns, along with existing political pressures on supply chains, have created considerable difficulties. Input and freight costs have risen dramatically, shipping volumes have surged and created bottlenecks, and lead times for manufactured goods have worsened.

To learn more about how KY3P can help improve your third-party risk management program, visit: KY3P for Procurement

Watch Interview: Future-proofing the supply chain in 2022

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