No matter what part of the commercial sector you operate in, one of the key risks your business faces is the threat to your supply chain.
This is true across the world, with findings from last year’s Supply Chain Resilience Survey Report (released in November 2014) highlighting a number of worrying statistics, chiefly:
- 5% of respondents do not have full visibility of their supply chains;
- Only 26.5% of organisations coordinate and report supply chain disruption enterprise-wide;
- 76% of respondents report at least one instance of supply chain disruption last year;
- The primary sources of disruption to supply chains in the last 12 months were unplanned IT and telecommunications outage (52.9%), adverse weather (51.6%) and outsourcer service failure (35.8%);
- The loss of productivity (58.5%) is the top consequence of supply chain disruptions;
- Almost a quarter of respondents (23.6%) report annual cumulative losses of at least €1 million due to supply chain disruptions.
A severe supply chain restriction is often entirely out of your control, yet it could have dire consequences for your business’s profits and reputation. So how can you combat this risk?
Minimising supply chain risk
At Emjay Insurance Brokers, we work with a range of clients of all sizes, from multi-million dollar mining and construction companies to farmers and SME enterprises. One thing that unites them all is the potential for broken or restricted supply chains impacting on their operations.
We offer a comprehensive range of advice and services to minimise both your supply chain exposures and the impact to your business should they come about.
Know your risks
The most crucial aspect of minimising risk to your supply chain is to thoroughly workshop and identify the risks you face, prioritise them and identify how they could impact on your business, your profits and your customers.
Solutions could include ensuring you have suppliers from different geographic areas; more effective tracking and monitoring systems; and increasing amount of stock you have in reserve. We have vast experience in advising clients on best practice in this area.
Have a contingency plan
When disaster strikes it’s important to have safeguards in place to ensure your business can cope with the set-backs and be back operating at maximum capacity again in the shortest time possible.
Through our partnership with specialist business continuity specialist Risk Management Partners, Emjay Insurance Brokers is able to offer our clients a comprehensive disaster recovery strategy service.
This will develop a risk impact analysis; and create a business continuity framework and recovery structure for all aspects of your enterprise.
Having the right insurance cover
Protecting your business from loss of profits that can be brought about by a cut supply chain should be an imperative for any business owner, and business interruption insurance can play a crucial role in helping businesses overcome such setbacks as part of a wider risk management process.
While it’s relatively common for major firms to have business interruption insurance in place, it’s relevant for businesses of all sizes – and could make all the difference between your business surviving a major loss by covering the loss of profits and expenses (including payroll). However, despite its importance, it’s thought that as few as 25% of Australian businesses have such insurance cover in place.
If you are looking for advice on how best to minimise supply chain risk to your business, contact Emjay Insurance Brokers on 02 9796 0400.
