244 | Wired Wisdom: Unraveling the Mysteries of Procurement Fraud with Stephanie Forbes Part 1

Welcome to a new episode of the Art of Consulting podcast, where we engage in deep discussions with some of the most knowledgeable and insightful professionals in the business world. Today, we are privileged to welcome Ms. Stephanie Forbes back to the show. Recognized as a national expert in value chain management, Stephanie brings over two decades of experience managing multi-billion dollar projects throughout Canada and the United States. Currently serving as interim vice chair of Supply Chain Canada, Alberta Institute, Stephanie is frequently sought after for her expertise and is known for her impact on the industry through her roles in leading panels, webinars, and podcasts, and as an international speaker. In this episode, Stephanie enlightens us on the complex and pressing issue of procurement fraud in the supply chain space. She shares her wealth of knowledge on the types of fraud organizations might encounter, the effects of such illegal acts, and the crucial steps necessary to prevent them. Prepare for an in-depth look at the importance of governance models, complex problem-solving, and the nuances of fraud prevention within the supply chain. 00:13 Introduction: We introduce Ms. Stephanie Forbes, a value chain expert with extensive experience in leading significant projects across North America. Her involvement with Supply Chain Canada and her reputation as an international speaker set the tone for our discussion on procurement fraud. 00:56 Stephanie's Vast Experience: Stephanie's rich background includes the creation of the Supply Chain Excellence Forum and her work with some of the largest organizations in North America. Her passion for complex problem-solving has made her an authoritative voice in the industry. 01:40 The Issue of Fraud in Supply Chains: We dive into the significant problem of fraud within supply chains, particularly its relation to ERP systems, and Stephanie's encounters with companies that fraudulent activities have victimized. 02:48 What Is Procurement Fraud?: Stephanie offers a precise definition of procurement fraud and discusses its impact on organizations, providing a foundation for further exploration of the subject. 03:29 Types of Procurement Fraud: Detailed explanation of various forms of procurement fraud, including employee collusion, bribery, conflicts of interest, bid rigging, and product substitution, shedding light on their intricacies and consequences. 05:29 The Case of Data Manipulation and Fraud: Stephanie shares a real-life example of data manipulation that led to a $9 million financial loss, emphasizing the need for stringent data management and control measures to prevent such fraud. 14:54 The Role of ERP Systems: The conversation turns to how Enterprise Resource Planning (ERP) systems can play a crucial role in maintaining compliance data and acting as a deterrent against fraud. 22:43 Lessons Learned from Fraud Cases: Stephanie emphasizes the importance of being open about instances of fraud, sharing lessons learned, and implementing continuous education and robust auditing processes to mitigate future risks. 31:58 Importance of Training in Fraud Prevention: The discussion highlights the significance of training staff, sharing information on fraud occurrences, and encouraging a culture of continuous learning to prevent fraudulent activities. Episode Highlights: 00:13 - Introducing the expertise and contributions of Stephanie Forbes in the supply chain management sector. 05:29 - Insights into the complex world of procurement fraud and the real consequences for organizations. 14:54 - Discussing the preventative measures and governance that can be put in place to combat fraud within companies. 31:58 - The importance of employee education and transparent communication in preventing and addressing fraud. About Our Guest: Stephanie Forbes is a seasoned executive adept in business, risk management, and supply chain disciplines. She has driven transformation within teams, projects, and programs in the energy and construction sectors, leaving a lasting impact. Stephanie is dedicated to advancing the supply chain profession, creating value through her speaking engagements, mentorship, and network. Her achievements include implementing best-in-class programs like full life cycle governance and supplier life cycle management. With an eye toward future opportunities, Stephanie is driven to contribute significantly to her industry and the field of supply chain management. Where to Find Our Guest Online: LinkedIn - Stephanie Forbes: http://linkedin.com/in/calgaryforbes