Retail and Consumer Products

1.1. Supply Chain Risk

In the Retail and Consumer Products (RCP) industry, it is critical to have an efficient and effective supply chain. Presenting opportunities and risks, the supply chain is one of the last, best areas from which to reduce costs in a company’s operations. Beyond that, flexible supply chains enable greater connectivity and collaboration between business partners. Done right, this can improve operational effectiveness, customer service and, ultimately, profitability.

But with greater connectivity comes greater risks. Data and application security are obvious risks, as is the risk of maintaining the availability, accuracy, and integrity of the data that is transferred between partners. Ensuring continuity in the event of business disruptions is another major risk area. Companies also take on financial risk when they invest in supply chain management tools and technologies, and they assume tax risk when they choose where and how to manufacture, distribute, and transport goods. As supply chains become more complex, as has been the trend in recent years, exposure to risk also increases.

As retail and consumer products companies continue to target the supply chain for cost savings and strategic advantage they increase their exposure to risk in several areas, including data integrity. To achieve the full promise of supply chain management, companies should consider the opportunities presented by such initiatives, while focusing more of their efforts on governance and measurement. In today’s increasingly challenging global marketplace, it is extremely important for retail and consumer products companies to align their tax planning with their evolving business operations.

Supply chain risks are many. They include supply interruption risks, purchase price risk, regulatory and compliance risks, customer dissatisfaction and service risks, process inefficiency risks, product introduction and cycle time risks, information integrity and availability risks, planning and integration risks, inventory and obsolescence risks, information