@Risk

A group of nine companies is testing newly developed Key Performance Indicators (KPIs) designed to assess reputational risks and operational shortcomings associated with labor and human rights factors in corporate supply chains.

Developed as part of the Fair Labor Association (FLA) and Harvard Law School?s Pension and Capital Stewardship Project and with funding from the Investor Responsibility Research Center (IRRC) Institute, this KPI initiative is the first effort of its kind to create a standardized method to assess such risks.

The nine companies involved collectively source from 1,755 factories that employ about 1.8 million workers in 62 countries. They are testing KPIs in the following areas, with a host of detailed underlying information for each category: (more…)

Pursuing deals in growth markets can be tremendously beneficial.  But, doing business in growth markets is inherently more risky, too.

What can your company do to take advantage of the benefits (low cost manufacturing, access to natural resources, market access for basic global products, buyers with access to core operations, etc.), while mitigating potential pitfalls?

For starters, you may want to read PwC’s new study, Getting on the Right Side of the Delta: A Deal-maker’s Guide to Growth Economies. After analyzing 200 deals (both publicly announced and private ones for which PwC was an advisor) and interviewing 20 leading dealmakers around the world, PwC found that:

• The majority of deal risks typically relate to one or more of three key elements: the asset itself, the seller, or the government.
• The most common barrier to deal completion is an inability to get comfortable with valuations. 40 percent of failed deals in PwC’s data set fell victim to valuation concerns.
• The most common problems that emerge after a deal closes concern partnering, causing 30 percent of problems post-deal.  Beyond partnering, the same issues that prevent deals from closing also frequently emerge post-deal (direct government interference, problems with financial information and non-compliant business practices).

Fortunately, PwC’s report also includes five key recommendations for dealmakers when pursuing deals in growth markets. PwC advises dealmakers to: (more…)

Over the past few years, most global companies have intensified their focus enterprise-wide risk management (ERM).

Unfortunately, though, a new survey by the Zurich Financial Services Group (Zurich) found that only a small fraction of business executives are confident in how their organizations are managing risk.

Here are a few of the key findings from the study. Among the 1,419 business executives surveyed: (more…)

The International Telecommunication Union estimates that 90 percent of the global population is now covered by a 2G mobile cellular network. (Half that, or 45 percent, is covered by 3G.)

But, of course, that global population is on land. If you’re out on the open seas, it’s a different story.  Not surprisingly, the oceans are the last “white spot” for the mobile communication industry to connect.

Earlier this month, Maersk Line, the largest shipping company in the world, announced that it is taking steps to change all that.  The company has appointed Ericsson to introduce end-to-end systems integration and deployment of mobile and satellite communication to the entire Maersk Line fleet.

More specifically, over the next two years Maersk Line will outfit 400 of its 500+ container vessels with Ericsson antennas and GSM base stations. Upgrades to the remaining vessels will be made soon after.

It’s an important step, because as Ericsson points out, mobile communication provides opportunities for the shipping industry to upgrade several essential processes.  For example, until now, Maersk Line’s high-tech modern container ships have been equipped with satellite connectivity primarily intended to support communication for vital shipboard functions.  But Ericsson says its new integrated maritime mobile and very-small-aperture terminal (VSAT) satellite solution will allow Maersk Line to better address: (more…)

The US Pharmacopeial Convention (USP) has proposed a set of recommended best practices to help the pharmaceutical industry improve supply chain integrity and reduce risks of counterfeit or mishandled medicines.

Improvements like these are long overdue. As I reported last spring, research from PwC concluded that many pharmaceutical supply chains have suffered from what amounts to benign neglect. As a result, they are inefficient, under-utilized and ill-equipped to cope with new medicines, cost pressures and health reform expectations.

Sure, in today’s global economy relationships between suppliers and other business entities are often opaque and difficult to track, but clearly, it’s time for the pharmaceutical industry to step up to better ensure that medicines can be traced back to their original manufacturer, are not adulterated or counterfeited and are transported to their intended destination with their quality intact.

Too many companies have discovered the hard way that “willful blindness” only increases their culpability in the eyes of Federal agents, regulators who now are cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

Don’t take that kind of risk. Resolve that this is the year to start better managing your multiple supplier master databases as you monitor and mitigate supplier risk in a global operating arena.

“There is incentive for all players in the pharmaceutical industry—large and small companies, regulators and standards-setting bodies—to come to some agreement on hotbutton issues such as track and trace technology and, at the larger level, to codify what constitutes a solid, universal approach to global supply chain integrity,” said Praveen Tyle, Ph.D., chief science officer for USP.

USP’s proposed standard covers four main areas: (more…)