@Risk

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…)

China is exposed to significant natural threats, including earthquakes, windstorms, floods and tsunamis, and a new study from FM Global revealed there is growing concern that a natural disaster in China will have a severe impact on supply chains –even more than the 2011 Japan earthquake and tsunami did.

The FM Global Supply Chain Risk Study surveyed 100 financial execs at large multinational corporations and found that: (more…)

Results of the 2011 Change in the (Supply) Chain survey show that many Japanese high-tech companies are shifting supply sourcing locations from domestic to other Asian countries, such as South East Asia.

More specifically, the survey, which was conducted by IDC Manufacturing Insights and commissioned by UPS, revealed that:

• The Japanese companies interviewed expect to reduce their domestic supply sourcing by nearly half, from 96 percent to 53 percent in the next three to five years.
• These companies also expect to increase sourcing from Mature Asia Pacific Countries (Thailand, Malaysia, Hong Kong, and Singapore) almost threefold, from 9 percent to 24 percent.

The key concern appears to be cost management. More than two-thirds (68.9 percent) of the Japanese companies surveyed cited “reducing total supply chain costs” as the top supply chain priority in the past years. Not surprisingly, cost is also expected to remain one of the top drivers of change in the supply chain in the next three to five years. (more…)

In the second annual Carbon Disclosure Project (CDP) Water Disclosure Global Report released last week, more than half (59 percent) of the companies surveyed said they are exposed to water-related risks such as flooding, scarcity and reputational damage.

What’s more, almost four in 10 (38 percent) already have experienced water-related business impacts, including disruption to operations from severe weather events (e.g., flooding) and water shortages.

And companies described most of their water risks as near- term. Nearly two-thirds (66 percent) of risks in the supply chain and 64 percent of risks in direct operations were identified as occurring between now and 2016.

But even so, the report also found that only 57 percent of the 190 publicly listed organizations that participated in the survey implement board-level oversight of water policies, strategies or plans. By comparison, a report released by CDP in September 2011 showed that 94 percent of Global 500 companies report board-level oversight of climate change.

Why the gap? While it’s encouraging to see that awareness about water risks is on the rise, it’s also clear that companies need to strengthen their oversight of water-related issues –particularly in the supply chain. The CDP report revealed that more than one-third of companies (38 percent) are unaware of whether they are exposed to water risk in their supply chains. In the Consumer Discretionary sector, which is dominated by industries that are particularly exposed to supply chain risk (e.g., retailers, hotels, resorts, and automobile manufacturers), that percentage rose to 41 percent.

The report also found that: (more…)

Supply chain failures continue to plague companies worldwide.

A recent study conducted by the Business Continuity Institute (BCI) found that a full 85 percent of the companies surveyed recorded at least one supply chain disruption in 2011. Interestingly, 40 percent of those disruptions originated further down the supply chain, past first tiers suppliers.

The research, which analyzed responses from more than 550 organizations across more than 60 countries, also revealed that: (more…)