Building Resilient Supply Chains with Vendors and Digital Tools

Building Resilient Supply Chains with Vendors and Digital Tools

According to an article by Thomson Reuters, globalization has made supply chains more dynamic but less stable, with recent global crises highlighting disruption risks. When companies need to quickly switch or onboard new suppliers, the risk of fraudulent vendors increases, leading to potential reputational and legal issues. Manufacturers must ensure compliance to build resilient supply chains from start to finish, not just within their organizations.

One solution involves using digital tools, especially those powered by machine learning and AI, to significantly improve Know Your Vendor (KYV) processes by providing more comprehensive and up-to-date intelligence. These tools enable companies to evaluate not only the business practices of suppliers but also the individuals and entities involved in their networks. This capability helps avoid conducting business with sanctioned individuals and enables a deeper understanding of ownership and connections.

Another strategy is integrating effective data analytics, which not only merges public and proprietary records to illuminate key relationships, assigns risk scores to potential suppliers, and provides ongoing assessments with customized alerts but also emphasizes the need for skilled personnel to interpret this data and turn it into actionable insights.

The article also notes environmental concerns, particularly Scope 3 emissions from suppliers, as playing an increasingly pivotal role in shaping supply chain evaluations. Though monitoring vendor practices regarding carbon reduction remains challenging, advanced digital tools can provide a broader and more predictive view of environmental impacts.

Recent events such as COVID-19 and trade disruptions have also underscored the need for resilient supply chains. To better anticipate and plan for disruptions, the authors suggest companies can leverage KYV intelligence to screen multiple suppliers. Siemens is an example of this, which used AI-driven tools to quickly identify alternative suppliers during a supply crisis, effectively avoiding major disruptions.

Modern KYV practices, supported by evolving digital tools, are essential for building more resilient supply chains and ensuring transparency and reliability in supplier relationships.