Navigating Logistics Risks with Rubix Business Check: Enhancing Supply Chain Visibility and Mitigating Disruptions

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Navigating Logistics Risks with Rubix Business Check

Imagine you are a seasoned traveller planning a long journey. You decide to book accommodation at a hotel you have never stayed in before. Would you make the reservation without researching the hotel’s reviews, ratings, and overall reputation? Probably not. Just as travellers rely on reviews and ratings to make informed decisions about their accommodations, you must gather crucial information about potential business partners to reduce supply chain risks. This is where a Rubix Business Check Report becomes an indispensable tool since it provides insights into a company’s ownership, management, financial performance, statutory compliance, litigation history and customer and employee feedback. Based on all these data points, a scoring algorithm computes a Rubix Risk Score of an entity, which throws light on its risk profile.

The Rubix Business Check allows companies to assess and monitor the credit, supplier, and compliance risk of counterparties, including customers, distributors, dealers, suppliers, vendors, and franchisees. The Rubix Business Check helps companies to work only with those counterparties whose risk levels are within acceptable parameters and those that do not threaten the stability of a company’s supply chain and distribution network.

What is a Business Check Report?

A Business Check Report is a document that provides a legal, operational, and financial profile of a business along with a risk score. It includes the subject entity’s management background, financial history, creditworthiness, and risk-profile-related information. Your organisation can use it to assess the risk of doing business and decide on credit terms with new customers, distributors, dealers, distributors, and franchisees. Business check reports are also used before appointing new suppliers and vendors to ensure that they are financially capable of meeting the supply requirements of a company. Bankers obtain these reports about companies in India and overseas before taking lending or supply chain finance decisions; credit insurers obtain business check reports on domestic and international buyers before deciding to underwrite credit risk.

A Business Check Report typically has the following sections:

  • Identity Check (KYC Information)
  • Management and Directors’ background along with details of other companies where they are directors
  • Compliance Check (Goods and Services Tax (GST, Provident Fund (PF), Ministry of Corporate Affairs filings, etc)
  • Analysis of Financial Statements for three years, including profitability, liquidity, solvency and efficiency ratio analysis
  • Working Capital Assessment after studying the subject’s receivables and payables
  • Litigation Check that examines cases filed against and by the company
  • News Articles
  • Social Media Checks, including feedback from customers and employees

Based on the above, the Rubix Business Check Report assigns the subject entity a Risk Score, which throws light on the risk profile of a company (high, medium, low risk). When the counterparty is a customer, distributor, or dealer, the Business Check Report can recommend a Credit Limit and Credit Terms.

The information in this report is derived from structured and unstructured data from a wide gamut of sources, including statutory filings, financial statements, public records, news articles, and social media.

Managing Supply Chain Risks in the Logistics Industry Using Rubix Business Check

Rubix Business Check provides vital risk insights to logistics companies about their customers, suppliers, and vendors. This helps them in the following ways:

Finding Reliable Vendors

One of the most critical risks faced by logistics companies is vendor reliability. Choosing the right vendors who consistently deliver quality products and services on time is crucial for smooth supply chain operations—whether it be trucking and transport service providers, forwarders, customs house agents, warehousing and distribution companies, cold-storage centres, packaging material providers, or suppliers of equipment, fuel, manpower, etc. However, without access to reliable and up-to-date information about existing and potential vendors, logistics companies often find themselves in a precarious position, facing delays, inconsistent service quality, increased costs, and operational disruptions. This can have a cascading effect, impacting distribution schedules, customer satisfaction, and ultimately, the logistics company’s reputation.

Rubix Business Check provides detailed reports on vendors’ financial stability, reputation, and operational capabilities. Logistics companies can use this information to make informed decisions when selecting and onboarding suppliers, reducing the risk of disruptions and building relationships based on trust.

Mitigating Risk

Logistics companies face a variety of counterparty risks that can impact their operations and profitability. First and foremost, is credit risk. If customers, distributors, or cargo consolidators are unable to pay for logistics services in a timely manner, it can lead to cash flow problems and impact the logistics company’s ability to meet its own financial obligations. Operational risks can arise if suppliers or vendors fail to provide timely services. This can lead to delays that stretch beyond the agreed Turn Around Time (TAT); such delays cascade to the logistics companies’ customers, causing stock shortages, production delays, lost revenue, increased costs, and reputational damage. Logistics companies may face compliance risks if their suppliers or vendors fail to comply with regulations related to labour, environmental, or safety standards, e.g., if trucking companies use vehicles without appropriate pollution control certification or if a labour contractor provides underage labour for the loading and unloading of cargo. These compliance risks can, in turn, lead to legal and reputational risks for the company.

However, an annual Rubix Business Check of each counterparty can help logistics companies identify and mitigate potential credit, supplier, and compliance risks. This is because a Rubix Business Check Report consists of the following information:

  • Company identity check (KYC)
  • Firmographic details/business facts
  • History of changes in the Legal name of the subject entity
  • Rubix Risk Score and Risk Category (High, Medium, Low), along with score rationale
  • Recommended Credit Limit, along with rationale
  • Statutory Compliance information
  • External Credit Ratings issued by accredited Credit Rating Agencies
  • Legal cases filed against, or by, the entity in various courts and tribunals
  • Current Board of Directors; Partners or Proprietor
  • Details of other company directorships held by Directors, Partners, Proprietor
  • Ownership Details
  • Shareholding Pattern
  • Additional Funding since the end of the previous financial year (this is particularly useful for assessing the cash flow of loss-making start-ups)
  • Detailed Balance Sheet
  • Detailed Profit and Loss Account
  • Cash Flow Statement
  • Rubix Revenue and Profit estimates for proprietorship and partnership firms (in the absence of financial statements, as these firms do not need to file their financials with the Ministry of Corporate Affairs)
  • Solvency Ratios
  • Leverage Ratios
  • Efficiency Ratios
  • Profitability Ratios
  • Contingent Liabilities
  • Quarterly Financial Results
  • Segment-wise Financial Reporting
  • Auditor Details
  • Banker Details
  • Related Party Transactions
  • Subsidiary Information
  • Index of Charges filed with the MCA for registered charges created by banks and financial institutions over the assets of the company
  • Social media (Customer and Employee Sentiment Score)
  • Details of Import and Export Shipments
  • Published news about the entity

Better Visibility of Points of Failure in the Supply Chain

Having supply chain visibility is of paramount importance for logistics companies in today’s complex and interconnected business landscape. This is no easy feat because numerous stakeholders, multiple touchpoints, and intricate processes are involved. A single weak link can wreak havoc on the entire supply chain. Supply chain visibility allows logistics companies to proactively identify weak entities that can cause potential bottlenecks, delays, or disruptions. For instance, if a trucking company is cash-strapped, it may delay payments for fuel because of which its trucks may not be refuelled, and, hence, get significantly delayed. With complete visibility and updates about the changing risk profiles of their vendors, logistics companies can strengthen or replace weak vendors, ensuring that the supply chain keeps humming efficiently.

By accessing Rubix Business Check reports, logistics companies gain a holistic view of their supply chain network, allowing them to assess and monitor the risk of their counterparties for identifying potential weak links and making informed decisions. Thus, with the information provided in Rubix Business Check reports, logistics companies can optimise their supply chain, minimise disruptions, enhance operational efficiency, and deliver superior value to their customers.

You too can unlock the power of Rubix Business Check Reports to assess and monitor the risk of your supply chain partners. Contact us today at or 022-49744274.

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