Over two-thirds (69%) of businesses believe they lack the necessary visibility over their supply chains to protect their reputations.
This comes from a new research piece from Moody’s Analytics around third party risk management.
Other findings from the report are that 70% of businesses are growing their investment in third party risk management, and 74% rated their third party risk management sophistication as either poor or mediocre.
Causes of these problems are a lack of data, difficulty evaluating every organisation in a supplier network and the responsibility for supply chain visibility being spread across departments.
Moody’s stated that identifying risks associated with suppliers buried in the supply chain is crucial to corporate responsibility and to protecting reputations, especially for consumer-facing businesses and regulated organisations that are sensitive to reputational risk.
However, getting visibility into operations and suppliers in lower tiers of the supply chain is difficult due to data not being available or firms not required to release information.
Moody’s Analytics general manager Keith Berry said, “The past couple of years have brought supply chain risk to the fore. Organisations that can account for the environmental impact of their suppliers and demonstrate that they work with fair and ethical organisations can better protect their reputations and are more appealing to consumers. It’s clear that visibility of supply chain risks can provide huge competitive advantages.”
The report highlights four key advantages of improved third-party risk management: avoidance of reputational damage, improved operational resilience, avoidance of fines and faster time to supply chain recovery following disruption.
Another recent report from Moody’s Analytics found that the majority of organisations see the digital sophistication of their KYC approach as mediocre or poor. The report found that 76% of organisations assess the digital sophistication of their own KYC approach as either poor (29%) or mediocre (47%).
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