This is how proactive risk management in the supply chain succeeds

Supply chain This is how proactive risk management in the supply chain succeeds

2024-10-24 From Margit Kuther | Translated by AI 4 min Reading Time

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Through real-time risk monitoring and integrated sustainability and due diligence data, Sphera Supply Chain Transparency contributes to strengthening every link in the supply chain.

Supply Chain: Real-time risk monitoring ensures greater transparency.(Image: Markus Kammermann / Pixabay) — Supply Chain: Real-time risk monitoring ensures greater transparency.
(Image: Markus Kammermann / Pixabay)

In today's world, characterized by dynamic risks in global supply chains and constantly evolving sustainability and due diligence requirements regarding the supply chain, companies need tools and actionable insights that enable them to cope with uncertainties, anticipate disruptions, and comply with regulations.

Global supply chain regulations

Supply chains are currently being scrutinized more closely in many parts of the world as regulations such as the EU Corporate Sustainability Due Diligence Directive (CSDDD), the German Supply Chain Due Diligence Act (LkSG), the European Carbon Border Adjustment Mechanism (CBAM), and the EU Deforestation Regulation (EUDR) have been introduced to hold companies accountable for human rights violations and environmental impacts in their supply chains.

By integrating Supply Chain Sustainability (SCS) and Supply Chain Risk Management (SCRM) on one platform, Sphera's Supply Chain Transparency (SCT) product line provides companies with end-to-end transparency across the entire supply chain to effectively manage supply chain risks, sustainability, and compliance with legal regulations.

Supply chains are subject to unprecedented fluctuations, including network disruptions due to extreme weather events, economic trends, cybersecurity incidents, and ESG risks

Paul Marushka, CEO and President of Sphera

"Companies are also under increasing pressure to comply with globally applicable ESG regulations and meet consumer demands for more transparency and ethical sourcing practices. A holistic approach to risk management and sustainability in the supply chain not only enables companies to address risks before they disrupt business operations but also to build resilient supply chains that can adapt more quickly to changing situations, withstand stresses, and recover swiftly."

The Supply Chain Transparency (SCT) product line from Sphera offers procurement, supply chain, and sustainability professionals an innovative solution for risk mitigation and strengthening their supply chain. The ability to proactively monitor risks, collect and analyze data from direct suppliers, and adapt to new standards helps companies reduce potential risk costs, gain competitive advantages, and build transparent and agile supply chains.

Real-time risk monitoring

Sphera SCRM (formerly riskmethods) uses AI and a team of risk research experts to validate and manage information from internal and external data sources, enabling real-time risk monitoring. An enhanced risk profile gives companies a competitive advantage as a well-thought-out approach ensures business continuity, protects the company's reputation, and reduces costs associated with supply chain risks. Sphera SCRM sends alerts to users that provide actionable information, allowing companies to take countermeasures as early as possible. They can also proactively monitor the situation to respond to further developments and mitigate impacts. Here are some examples:

In the run-up to the congestion of the Panama Canal, through which 6% of global sea trade and 40 percent of all US container traffic flows, the first warning was issued in April 2023 when the Panama Canal authorities first imposed restrictions. From August 8, 2023, Sphera SCRM informed its clients about delays in the Panama Canal due to low water levels, and the warnings continued throughout the crisis.
During the recent historic floods in Europe, warnings about heavy rainfall in the southern parts of Europe were issued as early as September 5, 2024. Throughout the course of the flooding, a total of 115 warnings were sent to users, which also included impacts such as power outages and delivery delays. The effects led to some factories halting production, some stores closing, and issues with material transport by rail.
When a strike by dockworkers at 36 major ports along the East and Gulf coasts of the USA was looming, early warnings were sent to users on August 13, 2024, via the "Countrywide Industrial Disputes" indicator, and ten more alerts were issued by the second day of the strike.

Sphera SCS (formerly SupplyShift) offers monitoring of ESG and regulatory risks with direct insight into every level of a company's supply chain. The solution enables optimized supplier integration and direct performance transparency through standardized evaluations, multi-tier data collection, and auditable, quantifiable supplier data to ensure compliance with regulations and assist companies in building more responsible supply chains. Sphera SCS supports companies in the following areas:

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Date: 08.12.2025

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Linking every level of supply chain data with comprehensive sustainability initiatives.
Identification, analysis, and measurement of supplier performance to drive improvements.
Operationalization of compliance and sustainability goals through the integration of industry-specific supplier data into corporate systems, including the capture of direct Scope 3 data.
Ensuring compliance with regulations through robust traceability, auditing, and validation processes.

"Given the increasing regulatory pressure combined with a myriad of hidden risks in the supply chain, companies must be able to proactively mitigate risks and build resilient, sustainable supply chains," emphasizes Naved Siddique, Chief Product Officer of Sphera. "That's exactly what we offer with our Supply Chain Transparency solution. With Supply Chain Sustainability, you get deeper insights into multiple levels of the supply chain and can seamlessly capture environmental, human rights, and other sustainability data from suppliers, while Supply Chain Risk Management delivers AI-driven insights for early risk detection and real-time monitoring across the entire supply network. This enables companies to have unprecedented risk transparency, proactive risk management, integration of sustainability, and compliance with regulations." (mk)