Managing Third Party Risks amid Supply Chain Disruptions
The COVID-19 pandemic has forced many countries to quarantine cities or regions and have implemented social distancing to break the chain of infection. These circumstances disrupt supply chains and impact businesses globally.
The Supply Chain and Automotive Technology team at IHS Markint conducted a survey among executives in automotive suppliers in all major regions to obtain insight on suppliers’ perceptions about the impact of the COVID-19 pandemic on their manufacturing operations and supply chains.
The survey results highlighted that one-third of suppliers reported moderate to severe effects. However, there is still a high level of uncertainty among vehicle partition manufacturers regarding sustainability and business outlook. A weak demand for vehicles due to the shutdown of Original Equipment Manufacturer (OEM) and limited availability of raw materials due to logistical problems are the two main problems.
These results indicate that the disruption of the suppliers’ operations positively affects the business activities of the companies that work with them. To respond to the disruption in the supply chain, companies need to implement a more persistent third party risk management effort.
Under business as usual settings, third party risk management is carried out with due diligence and monitoring. During a pandemic like today, the company needs to review the risks that are potentially posed by third parties. One way to do this is to provide questionnaires to the third parties operating in affected areas or to those who are most likely to be impacted. Through the questionnaire, the company can ask a third party to tell them how they are affected, how severely they have been affected, and what actions they have taken to cope.
The review is essential to minimize the long-term impact of the pandemic on businesses.
Integrity Indonesia, with up to more than fifteen years of experience in the compliance industry, offers you a comprehensive due diligence service through Know Your Vendor™. By using the most recent technologies to monitor clients’ supply chains, Know Your Vendor™ allows the client to import their vendors and assign to each of them a questionnaire, this is a critical step for the due diligence process. Clients can follow the progression of the due diligence in real-time and access the report and score with a click of a button.
For more detailed information on how Know Your Vendor™ and other compliance services can help your company, contact us today!