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James Edward Johnson
Director of Supply Chain Risk Management and Analysis, Nielsen
Supernova Award Category:
Matrix Commerce
The Company:
Nielsen is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen's Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content—video, audio and text—is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry's only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population.
The Problem:
Nielsen believes that companies have a shared responsibility to manage supply chains for the greater good. World development has made some people richer, and left a lot of people behind. Because Nielsen is so active in the supply chain, they touch millions of lives. Rather than be part of the problem, Nielsen wanted to be a force for good to ensure that when they negotiate deals, the push for price isn’t merely favoring companies that will cut corners, abuse workers or enslave people. The issue was Nielsen didn’t have visibility to know where the risk was in the supply chain. They had poor data quality, and disconnected processes. The biggest red flag is not having a clear and universally applied process to detect and address risk. In the absence of clear risk management and an effective vendor monitoring process, businesses should presume that the supply chain contains bribery, corruption and forced labor. If a company’s supply chain touches certain countries, the question of bribery and corruption can be one of “how much” and not “if”.
The Solution:
Neilsen now uses SAP Ariba Supplier Risk to conduct due diligence at scale faster and more efficiently. SAP Ariba is a great platform because it’s data-neutral. They work with groups like Outside IQ, who find and read documents from everywhere in the world. They also work with groups such as Made In a Free World and Samasource, leveraging digital networks, machine learning and data mining to detect and mitigate risks. Working with SAP Ariba, Nielsen has implemented a risk management program that scores suppliers for risk based on geographic, industry, and firm-specific traits – while considering how that supplier’s goods or services will be used by the company. The result of that scoring routes the supplier for review based on the risk level and type. Without risk scores that incorporate the various available data sets from SAP Ariba and partners like Outside IQ, the results of a risk assessment would be too complicated and subjective to effectively audit.
The Results:
By finding and solving problems in the supply chain, Nielsen can make a difference in the world. Working with SAP Ariba to improve its risk management and take a stand against slave labor in the supply chain, Nielsen has driven digital transformation within its organization that is making Nielsen an agent of change for social good. Nielsen is engagin in supplier activity with more integrity, more transparency -- bringing improvements into the lives of workers in impovershed communities, preserving the Earth for future generations, and stopping the practics that breed corruption and oppress people around the world.
Metrics:
Nielsen is able to effectively eliminate risk in its supply chain, by analyzing billions of data points about its suppliy chain, identify potential risks, and correct them or change suppliers to do business with a more ethical company. Nielsen is great with data, it's what they do -- but not supplier data. Like most companies, they were reactive to questions from legal, finance, audit, etc. As a result, they reacted to risks that last caused them problems. Now, as they onboard new suppliers or do regular checks of their suppliers, a risk due diligence check is an integrated part of the process. All of the data they need to asses risk is found in one place, at their finger tips within a user-friendly dashboard. The system can also alert them to when a supplier may not be in compliance, so they are proactively monitoring and responding to risks as they arise. Instead of responding to issues when asked, Nielsen's risk management team is proactively managing risks before they are asked about them.
The Technology:
SAP Ariba Supplier Risk
Exiger Company
OutsideIQ DDIQ application
Disruptive Factor:
Nielsen touches the lives of millions of people and is driving change in the industry, setting an example for how companies can do better business. They believe supplier management isn’t only about getting the best prices for goods and services, but ensuring ethical supply chain activity. While most businesses don’t set out to engage in risky behavior, most are not proactive about identifying it. If a company manufactures electronic or textile products with a focus on price, it is almost certainly inviting forced labor into its supply chain. Even a services company that buys computers and other electronics for its workforce has a high risk of forced labor. Every project has its challenges – in Nielsen’s case, as with most supply chains, the biggest challenge to overcome was sheer volume and disparity of data. The other challenge was that of biases in reporting. To overcome this, Nielsen is implementing machine learning to improve the ability to determine reputation risks by stripping out selection and recency biases that may influence reputation scoring. The fact that machine learning can flag and report abuse in real time, instead of the usual months or years, can help Nielsen take more immediate action. For too long, companies have looked the other way, despite the potential of millions of slave laborers in their supply chains. Working with SAP Ariba, Nielsen is taking decisive action and helping eradicate modern slavery.
Shining Moment:
The shining moment for Nielsen was when they realized the ability to no longer being a fireman - putting out fires as they come up. Instead, they are an agent for social good within the business landscape. When risk is realized, they quickly switch suppliers, or work intensely with a supplier to correct an issue. It's not just about making Nielsen a more profitable company, it's about making the world a better place.