Security & Supply Chain: Data Analytics to Detect Supply Chain Fraud & Waste

by Sterling J. Scott, Marketing Communications Coordinator, MHI | @mhi_sterling

Most businesses are at risk of supply chain fraud, primarily financial fraud perpetrated by vendors and subcontractors. Furthermore, most of thee businesses lack the tools required to detect and prevent it. Deloitte recently released the results of a new study which found that less than one-third of businesses use the data analytics required to detect supply chain fraud and waste.

Some vendors and subcontractors misrepresent labor and material costs to inflate invoices while others sell fake or low-quality goods. Supply chain analytics provide a greater level of visibility and detail for reviewing and monitoring supply chains, including vendor and subcontractor activities.

Food Supply Chain Fraud: Meat Adulteration Scandal in Europe
The food supply chain is one of the most vulnerable to fraud and the most dangerous. The Meat Adulteration Scandal in Europe in 2013 serves as a case study example of the risk of supply chain fraud.  Horse meat originating from a Romanian slaughterhouse was relabeled as beef and distributed throughout Europe, infiltrating the human supply chain through burgers and beef products. Though the scandal only affected four factories under three parent companies, it took its toll on frozen burger sales which dipped 43% in one month in early 2013. Supply chain analytics would not only serve in quickly tracing the origin of the meat, but also prevent having to do so as real-time reporting would have provided greater visibility and an alert that a shipment of beef was sourced at a horse slaughterhouse.

Food Supply Chain Waste
One-third of food produced never reaches a plate according to the Food & Agriculture Organization (FAO) of the United Nations. This equates to almost $700 billion USD globally. Analytics can also help reduce waste in food supply chains by reducing inventory. When sales data can inform manufacturing, shipping, and storage, waste can be reduced, saving businesses money and saving the worlds resources.

More information on supply chain analytics and other innovations that drive supply chains are available in the 2014 Annual MHI Industry Report which can be downloaded at

MHI is a great resource for connecting suppliers of  supply chain products and solutions with the companies that need them. For more information on how MHI can help your business, visit