Supply Chain Fraud

If you’re not budgeting for fraud detection & reduction, you’d better be budgeting for fraud repercussions and damage-control!

What is supply chain fraud?

The supply chain exists internal and external to your organization’s walls. The supply chain involves vendors, customers, and employees, and includes all the operations of an organization, such as purchasing, accounting, distribution, sales order processing, manufacturing, quality assurance, etc.

Supply Chain Fraud encompasses any fraud that can happen in the operational internal and external supply chains, and includes white collar crimes. Supply Chain Fraud can be perpetrated by internal personnel (i.e. employees and management), external personnel (i.e. vendors and customers), or a mixture of both.

Supply Chain Fraud Examples
  • Asset Theft
  • Asset Misuse / Abuse
  • Purchasing Trigger Frauds
  • Purchase Order Frauds
  • Picking & Packing Frauds
  • Returns Frauds
  • Manufacturing Frauds
  • Quality Assurance Frauds
  • Receiving Frauds
  • Inventory Frauds
  • Invoice Frauds
  • Sales Commission Frauds
  • Shipping Frauds
  • Contract Terms Frauds
  • Chargeback Frauds
Supply Chain Fraud Repercussions
  • Manufacturing Downtime
  • Machinery Flush / Clean / Repair
  • Sourcing Replacement Vendors
  • Customer Credits
  • Consumer Lawsuits
  • Delayed New Products To Market
  • Delayed (Pre-Paid) Advertising Campaigns
  • Damage-Control Advertising Costs
  • Vendor Compliance Chargebacks
  • Product Recall Costs
  • Product Rework / Destruction Costs
  • Loss of Brand Trust
  • Loss of Market Share to Competitors
  • Regulatory Investigation Costs