According to a recent article in Industry Week on how you could reduce misconduct by making ethics everyone’s business, fraud costs organizations, on average, 7% of their annual revenue. Furthermore, a single incident of fraud in the manufacturing sector costs an average of $441,000 — a number that is higher than the financial services industry and the highest of any sector with a high incidence of fraud. In today’s economic climate, that’s 7% you can’t afford to lose.
That’s why you should take aggressive methods to combat fraud, and start by setting a positive, anti-fraud, tone at the top that makes ethics everyone’s business. Take a six sigma approach and deploy an anonymous company-wide reporting mechanism that allows every employee to report potential misconduct at any time without fear of reproach. And get an outside review by a fraud expert who can help you identify where fraud is most likely to occur in your supply chain and what steps you can take to prevent it. It will likely cost you a lot less than a single incidence of fraud would cost you.