Modern supply chain has become increasingly multilayered in nature. Larger projects, higher resource demands, and specialized skills requirements have made contracting frameworks more collaborative than ever. At least 38% of suppliers in the Avetta network rely on subcontractors for the provision of works and services to their clients. However, it is challenging to know which subcontractors are working on your projects, who are compliant with your requirements, and how your prime contractors are managing them.
Subcontractor Risk Profile
With each subsequent tier of subcontractors, operations and associated responsibilities tend to move beyond the visibility scope of hiring organizations. Such circumstances can make it difficult for you to gauge the potential risks arising from your tier 2 and 3 subcontractors, let alone mitigate them.
The following are some of the most common risks posed by subcontractors which continue to challenge supply chain resiliency:
Health and Safety Issues
Increased exposure to safety risks and lack of proper controls can often result in an injury or fatality which can have serious implications for a company.
Workplace Safety Violations
Often companies have little to no insight on the safety standards followed by tier 2 and tier 3 subcontractors.
Liability Risks
Extended network of subcontractors can often be susceptible to several types of risks in the form of health and safety, cybersecurity, and ESG non-compliance, for which the parent organization is often held liable.
Legal and Regulatory Violations
Violations stemming from poor management of subcontractors include conflicting material usage, corruption, inhuman working conditions and data abuse.
Data and Identity Theft
Even companies that manage their own data with the most robust security firewalls may fall victim to hackers if their third-party vendors utilize the information through less secure systems.
Reputational Damage from Unethical Practices
Companies may risk facing costly sanctions or suffer from reputational damage while unknowingly working w ith subcontractors indulging in unethical work practices.
Solution Capabilities
Prime contractors use the same location and filter-enhanced search as clients do to find subcontractors across the globe
Get a quick snapshot of all the subcontractors working for a prime contractor
Drill down into a subcontractor name to view all account and compliance details
Drill down into a subcontractor name to view all account and compliance details
Benefits
The subcontractor doesn’t get turned away from performing the work because they are not in Avetta and can comply prior to working which reduces the admin burden to the client and suppliers can readily see which subcontractors meet the requirements upon connection.
Avetta’s subcontractor management solution exists behind a feature toggle. Turn it on and it’s done. No one-off configurations needed.
View connections, trades, location, and compliance information for all the subcontractors
Primary suppliers can easily discover and connect with new subcontractors to work on your projects
Subcontractors go through the same level of prequalification and compliance requirements as your prime contractors, ensuring consistency