Thirty percent of companies reported experiencing some form of fraud in their supply chain, according to a
The percentage this year is consistent with two previous surveys by Deloitte Financial Advisory Services in 2014 and 2015 on the subject of supply chain fraud.
Two industries saw supply chain fraud rise between 2014 and 2016: life sciences and health care respondents report an increase to 35 percent in 2016 (31 percent in 2014); and energy and resources was 34 percent in 2016, compared to 27 percent in 2014. Conversely, technology, media and telecommunications reported a drop to 27 percent in 2016, from 2014’s 33 percent.
Two-thirds of the survey respondents (67.1 percent) indicated they are confident their employees will report any schemes they see in the coming year. However, that confidence could be displaced.
“In my 20 years conducting forensic investigations, trust in employees and third parties is often misplaced,” said Deloitte Advisory principal Mark Pearson in a statement. “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.”
Project managers and invoice approvers (26 percent) and procurement professionals (24.7 percent) present the largest risk of supply chain fraud, waste and abuse, according to the survey respondents. Only 27 percent of respondents’ organizations analyze unpaid invoices for evidence of supply chain fraud, waste and abuse prior to payment.
Nearly 30 percent of respondents said they use analytics to mitigate supply chain fraud and financial risks. However, 13.7 percent of the respondents said they have analytics software but don’t use it, and another 19.3 percent don’t use analytics for supply chain financial risk management at all.
