View this article online: https://www.insurancejournal.com/news/international/2009/06/17/101449.htm
Marsh’s UK office has issued a report – Manufacturing Industry Risk Footprint – which urges UK manufacturers to “put robust and flexible risk management systems in place to identify, mitigate and manage the risks facing their organizations to gain competitive advantage during the economic downturn.”
Marsh’s report details the 17 most commonly identified risks that should feature in the risk registers of manufacturers in the UK. It also concludes that, “while strategic risk accounts for a large proportion of the top risks facing organizations in the manufacturing industry, as a result of the financial crisis many companies are looking more closely at operational risks to improve their short-term efficiency and profitability.
Marsh listed the following as among the most common operational, financial, strategic, regulatory and hazard risks to manufacturers:
— Loss of key suppliers and customers as the recession continues to bite
— Breaches of regulatory requirements
— Financial risks associated with share price, borrowing and capital raising
— Inadequate monitoring systems, leading to reporting failure and disruption in supply
— Ineffective commercial venture e.g. joint venture, alliance, partnership
— Rising costs of new materials
— Loss of and the ability to retain skilled personnel
Michael Coomber, a Senior Consultant in the Strategic Risk Practice at Marsh, explained: “In an ever evolving world of risk, an organization’s strategy and response to risk will have an increasing influence on its continued success. Risk can provide significant upside value for businesses when it is managed effectively, whether it is in reducing volatile costs, making better informed decisions, or strengthening key client relationships.
“The UK manufacturing sector has been hit particularly hard by the recent volatility of the economy. Manufacturers need to review their risk registers more frequently, paying particular attention to how their supply chain and financial risks may have changed and taking appropriate measures to maintain their stability and protect their profit.
“In these tough times, manufacturers need to be confident that they have prepared for every eventuality and are reducing their total cost of risk wherever possible. They can do this by taking a more proactive approach to the management of risk and ensuring all elements of the organization’s risk footprint are captured, making them more robust and attractive to do business with.”
Source: Marsh – www.mmc.com or www.marsh.com