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.
Consider the dramatic challenges and trends that are disrupting this sector, starting with COVID-19. The global challenge has unleashed profound new inventory challenges -- many businesses 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.
The KPMG Third Party Risk Management outlook 2020, a survey of third-party risk management (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:
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