Leveraging risk mitigation at the regional or business unit levels in the post-Covid new normal

Risk monitoring tools and mitigation strategies have been critical success factors to help C-Level corporate executives guard their brand reputation and avoid potentially costly disruptions in revenue. These tools can also be an integral part of both operational excellence and customer centricity initiatives at the business unit and site level. From Vertaeon’s perspective, a cohesive risk program needs to be planned and deployed organization-wide from the corporate level. However, the ongoing Covid-19 crisis illustrates the need and relevance of these programs at the business unit level as well.

The recent Covid-19 shutdown has had varying impacts on the different business units of a global, diversified corporation depending on their location, the sectors and markets in which they are active, and the mapping of their suppliers or other partners. This uniqueness in the value chains requires a customized response to address their specific situation and associated risks. This extends not only to short-term pressures to restart or continue production and operations, but also to develop mid-to-long-term views for sourcing or delivery strategies and supplier/customer partnerships.  

Indeed, whether you are a business unit CEO, a divisional procurement head or in charge of operations, risk management tools along with customized support like the one offered by Vertaeon can have very practical benefits to address your currently identified supply chain issues. In a post-pandemic world, where divisional CEOs and operational leaders have to make faster decisions, the focus must be on their specific needs and segment-related risks. 

Once a risk monitoring tool is implemented, you will soon realize you cannot reasonably manage your business without this extra visibility. A recent MIT article analyzed the need for data visibility before organizations undertake digitization in a post-pandemic world.  We think that the insights provided here ring true beyond operational variables such as supply chain visibility into inventory shortages or logistics, to transparency into supplier practices, performance and viability.  One caveat of our experience is the differing sensitivity, and therefore dissemination levels of risk data and analytics, even within the same organization.  A risk analytics tool such as the one offered by Vertaeon helps managers gain this transparency, akin to how a dashboard helps a pilot fly safely! Business Intelligence software combined with the human touch is now perfectly capable of bringing the Artificial Intelligence (AI) boost we are witnessing broadly in assisted driving and other medical or scientific sectors… and apply it to risk identification and management. This also extends to a combination of AI and digital.

No organization can realistically monitor hundreds of indicators from hundreds, sometimes thousands of key Tier 1 and Tier 2 suppliers on a periodic basis, without the help of machine learning. Even the largest organizations with a dedicated business intelligence team cannot effectively prevent a situation where an external business partner from one of their divisions would ultimately become unreliable or even corrupt. In a recent incident, a large European automotive equipment provider faced serious consequences from dealing unknowingly with a corrupt business partner in an emerging market, which resulted in loss of hundreds of thousand of dollars in goods without possible legal action. In this case, the selective and non-systematic internal risk monitoring process on which the company was relying did not suffice for identifying this threat before it was too late.

In a bid to cater to the needs of both corporate and divisional or regional teams, Vertaeon’s highly versatile and scalable tool has the functionality to focus on the operational level and deliver tailored actionable plans. Here is how Vertaeon’s Risk Management Solution can help large divisions or different regions:

• Due diligence: When 3rd party support is needed to provide external evaluation for existing suppliers or for new candidates to replace a current underperforming one.  
• Market Segmentation: To help identify, categorize and rank all relevant players in your specific product or service needs beyond traditional segmentation.
• Cloud base system: Accessible to enterprise users without the need to implement a companywide complex IT system or commit to years of integration. With limited management time and training required, each division can also serve as a benchmark for other divisions or regions to follow suit. 

Post-covid scenarios and strategies are still emerging. A continued and evolving need for identifying risks and implementing resolutions will see businesses evaluating alternate solutions while maintaining integrity with corporate guidelines.

Much like we have been witnessing an accelerated acceptance of digitalization in business communication over the past few months, Vertaeon is anticipating a similar trend emerging in the global data sourcing and synthesis for risk mitigation management. Vertaeon is uniquely positioned to address this growing awareness and share this emerging need for corporations at all levels of the value chain.

Authors: David Chouvelon, Rekha Menon-Varma, Vertaeon LLC