|Data Analysis As A Defensive ... And Offensive ... Weapon Against Fraud
There are illicit activities such as counterfeiting, asset mismanagement, and theft, which happen within the bounds of the supply chain. Certainly these activities can have severe impact that affects the financial well-being of the organization.
In my definition of supply chain fraud I look beyond just those physical frauds and focus on the supply chain systems and the transactions that they produce. My business model showcases how traditional tried-and-true supply chain systems, and the transactions they output, that have been used for decades to analyze supply chain performance, can also be used to detect (and therefore reduce) fraud, both at the source at the time it is happening and through pattern analysis.
This business model better leverages the investment in supply chain systems like Enterprise Resource Planning (ERP), Electronic Data Interchange (EDI), and automatic identification (e.g. barcode labeling and scanning). By converting all supply chain transactions to electronic data, the ability to analyze for supply chain fraud is greatly enabled. Multiple department (e.g. audit, information technology, supply chain) goals can be met while shared collaborative company goals such as fraud reduction are now also feasible.
I will examine your organization's business software systems and operations, and provide an assessment on internal controls and my opinions on gaps where I believe fraud is likely to exist. I will include appropriate recommendations that I believe will provide insights in improving the current situation by closing the perceived gaps and adding checks-and-balances.
David Farrell, Head of Risk Management and IT, BOC Aviation Pte., October 2, 2013, Anti-Fraud Network
SmartPros' Financial Management Network educational seminar series - July 2017
Supply Chain Digest, November 14, 2016, "Should Companies Do More To Combat Supply Chain Fraud?"
"Fraud Detection Dos and Don'ts" - Supply Chain Quarterly, June 13, 2016