Consumers, governments and communities similar are anxious about their supply chain management and how the industrialized of consumer products impacts the lives of workers, their communities and the environment, as well as the security of the products produced.
Supply chain specialists have created many tools and frameworks to maintain the management of supplier risks, such as risk outlining techniques and the use of financial modelling to recognize the impact of supplier crash. These work best alongside Supply chain management audit team who are close to the audit committee and the management on supply chain issues and helping to build the right approach to risk. Such relationships ensure, for example, that supplier tendering processes are reviewed by internal audit and, once a supplier is selected, that contract negotiations with the selected supplier comprise access for internal audit to assess a supplier’s own risk management and controls or are able to view the supplier’s own internal audit reports.
Not only does this level of inspection enable a healthy and risk-aware approach on both sides of the supply deal, but it allows feasible problems to be addressed at the earliest possible occasion. Contracts that omit this can be difficult to renegotiate and opportunities to build positive risk-focused relationships between the organization and its suppliers are lost. This could have long term strategic consequences. If effective Supply Chain Audit Program is increasingly a key element of competitive advantage, then internal audit teams highly occupied in this aspect of the business are also significant to an organization’s competitive border.