The manufacturing industry has been contemplating many challenges, making the need for adaptation urgent. Manufacturing has one of the highest reported cases of fraud in any sector. It is globally estimated that organizations can lose up to 5% of their revenues to fraud in the manufacturing sector. ACFE’s Global Fraud Study estimated median loss in the sector at $250.000. Furthermore, they report that more than half of the organizations are unable to recover their losses. That’s why manufacturing companies must have fraud management mechanisms implemented. Prevention, detection, and investigation of fraud can be done by data analytics in frames of RAALS. Additionally, RAALS will help you identify areas of improvement, prevent corruption and manage warranty claims and costs.
Manufacturing companies are at considerable risk because there are a lot of internal and external players, from employees to contractors and vendors. Companies often lack oversight and internal control measures, which puts the business at risk. There are individuals, who perhaps commit fraudulent activity, waste resources, or abuse their position. What may happen is loss of raw materials, inventory or scrap parts, unauthorized transactions, modifying of records, theft of intellectual property, or other forms of leak of internal information. Another high risk in manufacturing is related to time management. Most problems occur when one party has a delay. That automatically means that the entire process is stopped or at least delayed. Supply chain issues have a huge effect on the sector. It is time-consuming and costly to fix them.
RAALS simultaneously checks all parts of the supply chain to prevent anomalies. RAALS manages your organization’s risk management and procurement strategy by reducing the cost, effort, and risk of managing suppliers. We can help your company mitigate price manipulations, briberies, kickbacks, etc. through the risk assessment of the Procurement function, identifying unusual relationships in non-financial data. It can help you address the risk of pilferage from the books and records, conduct effective due diligence on business partners, check the background of key business partners (suppliers, transporters, third parties, etc.) and be compliant with international and anti-bribery regulations. RAALS includes the establishment of effective processes to identify and monitor grey market diversion, monitor your channel, reporting and looking for unexplained sales spikes, atypical customers, etc., with an automatic alert. Misuse of advertisement and marketing, like advertising, spends, discount coupons, promotional items, spends on marketing events, … can also be identified and monitored. Furthermore, RAALS prevents theft of confidential customer data or supplier details and the company's Intellectual Property (IP) related to a new product launches or product development.