Global supply chains are still feeling the effects of disruption that began with the pandemic and continued with the military conflict in Ukraine. As well as affecting the global economy through energy price increases and high inflation, the conflict has added uncertainty to global supply chains.
As a result of the conflict, many organizations have suspended operations in Russia and Belarus. To comply with sanctions imposed by the EU and the US Office of Foreign Assets Control (OFAC), businesses have started to look at management and ownership of their suppliers to identify suppliers sanctioned directly and by extension.
Ownership data can help to identify sanctioned entities – but it should also be included in financial analysis of your suppliers. Ownership structures change rapidly and evolve constantly, and ownership may influence a supplier’s operations and performance.
Ownership data is therefore crucial for a comprehensive view of a supplier. Even where a supplier’s financial results are available, you may incur hidden risks if you neglect ownership. Many suppliers owned by a Russian entity have had orders canceled, which has immediately affected their operations and financials.
Looking at ownership is even more important when assessing suppliers that do not report financial results. Ownership data reveals if the supplier is part of a group, its location and size, as well as sector trends.
You can also use this information to analyze group spend to see if you are dealing with suppliers that are part of the same company. Doing so can enable you to negotiate better volume discounts and manage your supplier relationships more effectively.
As supply chains become more complex and interconnected, assessing each element is vital to manage and mitigate risks. Moody’s Analytics maps the links between companies and individuals for private and public companies across the globe.
Find out more about how we can help you to manage supply chain risk.