Retail and consumer goods businesses are at a critical crossroads in their management of third-party risk amid an alarming array of challenges that include COVID-19, unprecedented supply chain volatility, heightened regulatory scrutiny and the threat of fraud and corruption.
Today’s global environment is nothing less than a new reality for businesses. We believe that there is no time to lose in pursuing holistic third-party risk management (TPRM) programs that are designed to address the world of risk they now inhabit.
With inventory challenges, many businesses are facing a severe shortage of inventory while others grapple with oversupply and an inability to liquidate. Consumer goods manufacturers, meanwhile, are often chasing raw materials to meet demand. In response, many companies are shifting supply chains to new geographies and accelerating their supplier onboarding process—often ignoring required TPRM controls and thereby heightening the risk of violations that can include third-party fraud, corruption and bribery.
A KPMG 2020 global online survey of 1,100 senior TPRM executives, including consumer goods and retail sector leaders, reveals that the journey to effective TPRM has, for many businesses, barely begun despite today’s extreme challenges.
Third-party risk is on the rise amid global challenges, supply chain disruption, and fraud.
Roadblocks to third-party risk management transformation
Consumer & Retail companies surveyed cite these principal challenges.
lack of skills or capabilities
integration
regulatory concerns
employee resistance
lack of funding
data quality
As we work with clients pursuing TPRM solutions, we have developed one of the leading and tested frameworks for TPRM transformation built on four pillars: governance, process, infrastructure, and data.
The new reality dictates that timely, strategic change is critical to ensure future viability, growth and success. Businesses that delay the TPRM journey might do so at their own peril. For more information in how KPMG can assist please contact us.
