How transparent company data helps understand supply chain risk
Supply chains are on the mind of the public more than ever before, thanks to pandemic-related disruptions. The growing demand for better intelligence on supply chains also means that they look set to be a hot topic in corporate reporting in coming years. In this vein, we enjoyed a recent post from OpenCorporates considering how transparent legal entity data – of the type provided by the use of legal entity identifiers, or LEIs, as a kind of digital fingerprint for companies – helps create insights on supply chain risk.
As it observes, several factors have come together to make supply chains a major focus. In recent decades, companies have developed increasingly large and complex third-party ecosystems. Alongside the vulnerabilities exposed by Covid-19, we are seeing increasing regulatory pressure, with laws around the world requiring companies to mitigate and disclose supply-chain risk, and growing expectations from consumers and other stakeholder in terms of ethics and integrity.
“An essential first step in mitigating supply chain risk is knowing the third parties in your supply chain,” argues the post. We very much agree that “This information needs to be available as data: in a structured, transparent and helpful way – if you’re to be able to leverage it at scale. Transparent legal entity data acts as a foundational layer indicating ‘who’s who?’, with internal or external datasets then being layered on top to generate insights that can help to identify risk or optimise processes.” Specific applications of legal entity data discussed in the post include onboarding and risk profiling, ongoing monitoring, supply chain integrity, and insights and optimisation.
Read more here.