Why is Risk Management important?

Our whole society relies on a well-functioning supply chain. As individuals, businesses and entire nations we value the efficient transport of goods. Disruptions quickly threaten our way of life, and repercussions in today’s globally interconnected world can be far-reaching.

For businesses, any disruption entails damage. This can range from the financial damage of having to replace damaged or lost goods, to the commercial damage of not being able to meet client demands in time, resulting in a loss of reputation and good will. Whilst financial damage and liabilities may be covered by insurance, commercial damage is longer term and good business practice requires avoiding disruption wherever possible. Managing individual risks and exposures is key to reducing future losses. Identifying risks early saves time and resources and ultimately protects the bottom line. After all, prevention is better than cure.

Zurich’s Logistics and Marine Insurance Insights page will focus on the aspect of marine logistics: on cargo being moved from A to B and the risks and exposures that may be encountered in that process. It brings you topical articles and papers from New Zealand and around the world in a commitment to sharing our expertise in logistics and marine and helping your business become more resilient.

Supply Chain Resilience 2013

This Supply Chain Resilience report is the fifth in a series that started in 2009 to consider the challenge of developing resilient supply chains. This report, the result of a survey of 519 respondents from 71 countries, highlights the level, range and cost of disruptions that organizations face, and demonstrates how a disruption in one organization can spread out over the entire supply chain.

While a lot of risks and findings remain unchanged from 2012, a couple of risks have worked their way into the top five:

• Transport network disruption climbed from 14th place to fourth with 30% experiencing high or some impact. And disruptions due to cyber attacks have climbed from 18th to fifth place, as a result of high profile media reporting.
• High levels of supply chain disruption keep being reported, with a number of threats and concerns. Supply chain disruptions are not a matter of if but when, although their relative impact on the organisation can vary widely. It is clear from the results of this survey that supply chain disruptions continue to have a significant impact on business performance and the problem is not being effectively managed. With supply chain is a key performance issue for a business. Business Continuity planning needs to be a strategic priority with support from top management.