Harnessing Global Trade Data and Technology to Empower Collaborative Risk Mitigation

Written by Jackson Wood, Director, Industry Strategy, Global Trade Intelligence, Descartes Systems Group 

As trade risks continue to evolve, the need for a cross-functional approach to managing compliance is imperative.

I recently appeared as a guest on the podcast series Simply Trade hosted by Andy Shales and Lalo Solorzano from the Global Training Center. Andy and Lalo have a combined 60+ years in the global trade industry, and the show covers everything from logistics to technology. This was the final of three appearances to discuss the evolving nature of risk and opportunity for organizations that seek to grow their global trade aspirations and operations.  

In this third episode, we focused on how the use of global trade data and associated insights can enable a new paradigm of collaborative third-party due diligence and market analysis, and why organizations need to accelerate their efforts in harnessing the power of this approach. Catch up with the first and second episode.  

The push to mitigate “three-dimensional” risks — regulatory, reputational, and resiliency — is steering the industry toward a collaborative model that breaks down traditional departmental silos. This approach encourages organizations to build a cohesive risk mitigation strategy, not confined to the compliance department alone. 

Breaking Down Silos 

As global trade risks continue to proliferate and evolve, the need for a collaborative, cross-functional approach to effectively manage global trade compliance and supply chain risks is imperative. Representatives from procurement, logistics, and compliance must work together using the right tools and data to gain strategic insights. New technologies can help streamline processes and empower teams to focus on analysis rather than transactional tasks. 

Establishing a Supply Chain Risk and Compliance ‘Baseline’ 

The most critical initial task of a cross functional working group is to establish a clear picture of the organization’s supply chain in its current state. If this is not achieved, proactive exercises like scenario planning and risk modelling will not generate the appropriate level of insight. Mapping and calibrating how goods and services move throughout your global supply chain, understanding relationships beyond Tier 1 and lower supply tiers, and conducting effective due diligence on all third parties establishes a clear picture of reality and sets the organization up for a more strategic and impactful approach going forward. 

Data and Analytics Enable a Strategic Approach 

Operating from an accurate baseline perspective, cross functional teams are now positioned to begin a deep assessment of vulnerabilities and opportunities across the supply chain. Utilizing global trade datasets that show commodity flows, trade lane activities, supplier alternatives and risk assessments, teams are empowered to take an evidence-informed approach to scenario planning and alternative modelling.

Automation Unleashes Capacity and Creativity 

Utilizing readily available compliance and risk management technology solutions to automate things like landed cost estimates, commodity license determinations and third-party due diligence screening, organizations and teams can model variations more effectively and interrogate their findings in greater detail.  

The same automation can then be leveraged to continually monitor critical supply chain relationships, and even propose alternative options, in the event that risk levels increase beyond the organization’s comfort level. 

Agility and Resilience Embedded in the Business 

By adopting a collaborative approach to third-party due diligence and automating key elements of the process across functional domains, organizations can accelerate international growth while mitigating regulatory, reputational, and resiliency risks. 

Organizations that embrace this paradigm shift will not only navigate the complexities of regulatory requirements but also create value by enhancing their strategic position in the global market. As trade compliance undergoes a redefinition, organizations with a collaborative mindset can thrive, reaping the rewards of increased visibility and risk mitigation. 

It was a great pleasure spending time with Andy and Lalo covering these big strategic topics. I look forward to more conversations in the future as we continue to evolve our collective approach to international trade and compliance in a volatile and rapidly-changing global landscape. 

Reduce Risk and Accelerate Growth with Descartes

Descartes is a provider of  industry-leading 3^rd-party risk management solutions, including trade content for leading business systems, and denied party screening and global trade intelligence software. Our simple and straightforward solutions enable organizations to improve compliance processes, accelerate decision making, and drive business growth globally. 

Descartes Visual Compliance™ and Descartes MK™ Denied Party Screening solutions are flexible and modular, allowing organizations to pick the specific and exact functionality and content they need for their particular compliance needs and scale up later as and when necessary.  

Find out what our customers are saying about Descartes Denied Party Screening on G2 – an online third-party business software review platform. Additionally, you can read this essential buyer’s guide to denied party screening to help you select a solution that fits your needs.