Companies Pay for Supply Chain Peace of Mind

Outside firms track the potential impact of earthquakes, war, weather and other disasters on global supply chains

The Wall Street Journal
A growing number of firms are looking to help companies with global supply chains prepare for threats that range from financial problems at key suppliers to war and extreme weather.
A growing number of firms are looking to help companies with global supply chains prepare for threats that range from financial problems at key suppliers to war and extreme weather.

May 2, 2016—A growing number of firms are looking to help companies with global supply chains prepare for threats that range from financial problems at key suppliers to war and extreme weather. One of the latest entrants is accounting firm KPMG, which is adding earthquakes, social unrest and other problems to a supply chain intelligence service launched last year. The software, Third Party Intelligence, tracks news sites and other data, cross-referenced against the locations and financials of a company’s suppliers. Analysts then assess the risk and notify clients when there may be trouble ahead.

The service is one of a growing number of solutions that hope to use external data to help manage risk, a need underscored by the disruption caused by deadly earthquakes in Japan to companies from General Motors Co. to Sony Corp.

“As supply chains are becoming a lot more distributed and more global, companies are working with much smaller suppliers that are more difficult to track,” said Noha Tohamy, vice president of research at Gartner.

Such companies “are wanting to use big data and outside data as part of their understanding of risk exposure, combining information they have of their own supplier performance with what’s happening weather-wise, or with political unrest … to come up with mitigation strategies,” she said.

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