High Stakes: Mitigating Risk for Government Contractors

As supply chains expand globally and increase in complexity, so do rapidly evolving risks. Geopolitical factors, lack of visibility into tier-N suppliers, data dependencies, complex trade requirements and unforeseen disruptions like the coronavirus pandemic can all create the perfect storm of disruption for supply chains.

As a highly regulated industry, government contractors rely on the global supply chain to find suppliers with the best combination of performance, cost and delivery. However due to growing threats within the global trade environment, the U.S. government and subsequent intelligence agencies have levied a host of supply chain risk management demands and requirements for contractors.

Compliance is a Moving Target

Ensuring compliance requires an organization to understand its supply chain from end-to-end, covering raw-materials acquisition to product distribution. As a government contractor, the supply chain landscape requires compliance with far reaching laws, statues and regulations, including those of other countries.

For products sold to the U.S. government, country-of-origin restrictions are frequently imposed, holding steadfast from Tier 1 to Tier-N. Since June 2020, the Department of Defense (DoD) has published extensive watchlists restricting government contractors from utilizing certain suppliers. The DoD currently has four watchlists, with the most recently published on January 14, 2021.

Breaking these regulations can have significant implications, as supply chain risks to the government carry higher consequential ramifications. For government contractors who can’t risk compliance, closing the gap between visibility and suppliers is the best way to future-proof their supply chain.

Supplier Visibility & Playing by The Rules

According to Gartner’s “Future of Supply Chain: Crisis Shapes the Profession” report, the single greatest technological investment across the board was supporting supply chain visibility and mapping. Currently, 66% of companies are investing in the technology, with 25% planning to invest within the next two years. Only 9% of respondents reported no plans to invest over the next two years.

There is opportunity to improve supply chain compliance risk and visibility by automating, visualizing and applying analytics to existing trade requirements, but also introducing the capability to adapt to new requirements in real-time. By doing so an organization can equip itself to meet the compliance rigors of working with government entities.

The Changing Horizon

In the face of uncertainty, the global supply chain needs a fast and agile footprint to stay resilient. For government and defense contractors, they need even more – a harmonized and integrated supply chain management program that eliminates risk, enables execution and adherence to the highest standards of compliance.