Executive Briefings

Minimizing Risk Created By Suppliers' Behavior

For all of the innovations that have contributed to modern-day supply chain management, there remain a number of "black holes" of information that must be addressed, says Samad Muhammad, who oversees the aerospace and manufacturing sector for Atlantic Software Technologies. "The amount of information has exponentially gone up," he says. Gaps routinely occur as a result of information that is absent, misunderstood, lost in translation or simply too much to handle with current systems. Many manufacturers are coping with the challenges of globalization, resulting in longer supply lines and a broader array of suppliers scattered around the world. Companies find themselves dealing with a host of regulations that are specific to each country, raising the possibility of tainted or defective products.

In an Aberdeen Group survey of 191 chief supply officers, 90 percent said they were involved in importing or exporting, with a growing number of trading partners to consider. "How do you orchestrate that?" asks Aberdeen senior research analyst Bob Heaney.

Dealing with sub-tier suppliers is a particular challenge, says Muhammad. Good communications is a must. At the same time, companies must take care not to convey messages to unauthorized parties. A manufacturer might send a confidential e-mail to a supplier, which forwards it to another entity in violation of export control laws. Companies must comply fully with restricted-party screening procedures and other security requirements, Heaney adds. Failure to do so could shut the business down.

Protection of intellectual property is yet another critical issue, notes Muhammad. Again, the problem is especially thorny where multiple tiers of suppliers are involved. One of Muhammad's customers was experiencing delays of up to six weeks before information submitted by the supplier could be fully reviewed. Because of security concerns, the company was unable to upload the data. The solution lay in implementation of technology that allowed for the conveyance of crucial product information in a secure environment, while expediting the review process. The parties were able to achieve "a security layer that works for everybody," Muhammad says.

To view video in its entirety, click here

For all of the innovations that have contributed to modern-day supply chain management, there remain a number of "black holes" of information that must be addressed, says Samad Muhammad, who oversees the aerospace and manufacturing sector for Atlantic Software Technologies. "The amount of information has exponentially gone up," he says. Gaps routinely occur as a result of information that is absent, misunderstood, lost in translation or simply too much to handle with current systems. Many manufacturers are coping with the challenges of globalization, resulting in longer supply lines and a broader array of suppliers scattered around the world. Companies find themselves dealing with a host of regulations that are specific to each country, raising the possibility of tainted or defective products.

In an Aberdeen Group survey of 191 chief supply officers, 90 percent said they were involved in importing or exporting, with a growing number of trading partners to consider. "How do you orchestrate that?" asks Aberdeen senior research analyst Bob Heaney.

Dealing with sub-tier suppliers is a particular challenge, says Muhammad. Good communications is a must. At the same time, companies must take care not to convey messages to unauthorized parties. A manufacturer might send a confidential e-mail to a supplier, which forwards it to another entity in violation of export control laws. Companies must comply fully with restricted-party screening procedures and other security requirements, Heaney adds. Failure to do so could shut the business down.

Protection of intellectual property is yet another critical issue, notes Muhammad. Again, the problem is especially thorny where multiple tiers of suppliers are involved. One of Muhammad's customers was experiencing delays of up to six weeks before information submitted by the supplier could be fully reviewed. Because of security concerns, the company was unable to upload the data. The solution lay in implementation of technology that allowed for the conveyance of crucial product information in a secure environment, while expediting the review process. The parties were able to achieve "a security layer that works for everybody," Muhammad says.

To view video in its entirety, click here