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Thursday, September 02, 2010
Thursday, September 02, 2010
Latest Procurement News
Posted: Monday, October 12, 2009, 9:34AM
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KNOWLEDGE MANAGEMENT TAGS
"Risk Management", "Supply Chain Management"
Supply chain failure 'key risk' for global retail industry
The current economic slowdown, damage to reputation and disruption or supply chain failure are the top three risks facing global firms, new research reveals.Aon Analytics' 2009 US Retail Industry Report noted that preparedness for risk in the retail industry was demonstrated by having in place a plan to address the risk or having undertaken a formal review of that risk. Risk concerns for the top ten risks which retail respondents reported the lowest state of preparedness mirrored the top three risks - economic slowdown at 33 per cent, damage to reputation at 52 per cent and distribution or supply chain failure at 53 per cent - are typically more complex, difficult to control, enterprise-wide and carry a degree of predictability.
According to the report, more than 45 per cent of the retail respondents indicated that they rely on senior management intuition and experience as the primary method of identifying and assessing their major risks. Almost a quarter said they rely on business unit risk registers or key risk indicator worksheets for risk identification and business unit quantitative analysis for risk assessment.
"Effective risk management relies on informed and insightful decision-making, which requires quality data and informed interpretation," said Len Churnetski, managing director of the retail industry practice for Aon Risk Services.
"In practice, respondents to our report most likely are using a combination of methods to assess their levels of risk," he added.
"However, risk identification based on experience may cause retail companies to miss emerging or new risks. These methods also may not be consistent in their application, and they could lead toward risk aversion."
Aon Analytics also noted in the report that with respect to premiums, over the past year for the casualty lines of coverage reviewed, the retail industry averaged single digit rate decreases. For directors and officers' liability and property, average increases of 2.6 per cent and 2.8 per cent, respectively were recorded.
The Aon Global Risk Survey was conducted in October and November 2008 and is based on responses from 551 organisations in 40 countries.
Procurement Tags - Risk Management, Supply Chain Management
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