Supply Chain Fraud Levels Largely Unchanged for 3rd Consecutive Year

Supply Chain Fraud Levels Largely Unchanged for Third Consecutive Year, according to the latest survey from Deloitte...

According to the survey, for the third consecutive year, about 30% of Deloitte poll respondents say their companies experienced supply chain fraud, waste or abuse in the preceding year. Yet, just 29.3% of the same respondents use analytics to mitigate supply chain fraud and financial risks. Further, two-thirds (67.1%) of the respondents are confident employees will report any schemes they see in the coming year.

“In my 20 years conducting forensic investigations, trust in employees and third parties is often misplaced,” says Mark Pearson, Deloitte Advisory principal, Deloitte Financial Advisory Services LLP. “As a result, many organizations are trapped in a pay-and-chase model for fighting supply chain fraud—invoices are paid first, then retribution is sought much later when fraud is found, if it’s found at all. But, the supply chain forensics leading practice is a comprehensive and proactive, predictive approach tailored to organizational structure and industry sector,” notes Mr. Pearson.

“As distress from falling oil and gas prices puts pressure on the energy and resources industry, many leaders are working hard to avoid leaving any cash on the table,” observes Larry Kivett, Deloitte Advisory partner, Deloitte Financial Advisory Services LLP. “Using supply chain analytics to identify and investigate supply chain financial risks can help stem fraud schemes that we increasingly see in today’s challenging, complex, and global environment,” he adds.

“From a life sciences and health care perspective, regulatory and legislative pressure is expected to heighten around pricing and transparency for plans, providers, pharmaceutical companies and devices makers. It’s a good time to verify that your supply chain is not hiding any unsavory vendors or other fraud, waste, and abuse that could cause reputational harm and costly remediation later,” notes Mr. Pearson.

Larry Kivett, Deloitte Advisory partner, Deloitte Financial Advisory Services LLP. “Using supply chain analytics to identify and investigate supply chain financial risks can help stem fraud schemes that we increasingly see in today’s challenging, complex, and global environment,” he adds; "From a life sciences and health care perspective, regulatory and legislative pressure is expected to heighten around pricing and transparency for plans, providers, pharmaceutical companies and devices makers. It’s a good time to verify that your supply chain is not hiding any unsavory vendors or other fraud, waste, and abuse that could cause reputational harm and costly remediation later,” notes Mr. Pearson."

See the full survey from Deloitte.