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Risk of supply chain fraud increasing, report claims
Companies expanding their supply chains globally are becoming increasingly vulnerable to fraud, a new report has found.
The Kroll Global Fraud Report claimed that large companies who have outsourced and globalised their business processes were now at risk of becoming victims of a wide-array of frauds – from simple theft to the misrepresentation of inventory to fool investors, through to counterfeiting, grey market diversion and piracy.
“Fraud thrives on complexity and companies are facing fraud from the very beginning, on every single factor: raw materials, production, and delivery,” said Richard Abbey, a London-based managing director at Kroll.
“Today’s supply chains are a multi-faceted, complex web of relationships and processes that often spans a number of continents as companies become larger and more global in scope.”
The report identified the pharmaceutical industry as one that was under particular threat. The World Health Organisation (WHO) estimates that roughly 10 per cent of drugs currently on the worldwide market are counterfeit, a figure that may be as high as 25 per cent in the developing world.
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