6 in 10 businesses experienced at least one supply chain disruption in Asia Pacific in 2016

One in four businesses exceed ‎US$1 million in losses, but almost half of survey respondents in Asia Pacific did not insure their losses.

Zurich Insurance has revealed the key Asia Pacific findings of the Business Continuity Institute (BCI) “Supply Chain Resilience Report 2016”. Despite six out of ten organisations experiencing at least one supply chain disruption during the past year, with one in four exceeding ‎US$1 million in losses, the report found that almost half of survey respondents in Asia Pacific did not insure their losses.

Partnering with BCI for the eighth year, the annual report is regarded as one of the most authoritative benchmark reports in this business area. The key findings for Asia Pacific (APAC) this year are:

  1. IT/Telecom outages was named as the number one cause of supply chain disruption
  2. One in four organisations experienced cumulative losses of over ‎US$1 million
  3. 46% of organisations do not insure their losses, meaning they bore the full brunt of the cost
  4. Only 30% of disruptions occur with an immediate supplier
  5. 48% responded that top management have made commitments to supply chain resilience

Read more 6 in 10 businesses experienced at least one supply chain disruption in Asia Pacific in 2016

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Poor Visibility Puts a Majority of Organizations at Risk for Supply Chain Disruption

The majority of companies that experienced a supply chain disruption in the last year cited either a tier 1 or tier 2 supplier as the predominant source of the disruption, according to 2015 Supply Chain Resilience Report from the Business Continuity Institute and Zurich Insurance. Half of all respondents in the report cited a tier 1 supplier, the immediate or direct supplier, as the major source of the supply chain disruption and an additional 21% cited their tier 2 supplier, the supplier of the OEM’s tier 1 supplier.

The report also showed the majority (72%) of organizations lack full visibility into their supply chains. What is troublesome, too, is that nearly 1 in 10 (9%) of the more than 500 companies surveyed for the report do not fully know who their key suppliers are. This can no doubt make supply chain risk management even more difficult for firms that lack proper oversight on who exactly their suppliers are.

According to Thomas Kase, vice president of research at Spend Matters and an expert on supply chain risk, sometimes companies lack quality visibility and have a fragmented picture of their suppliers and what they deliver.
“The end result is a foggy mess,” Thomas said.

Read more at Poor Visibility Puts a Majority of Organizations at Risk for Supply Chain Disruption

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Retirement planning: How not to outlive your money

Retirement planning: How not to outlive your money

Retirement is ultimately an exercise in risk management – and dealing with risk involves an educated understanding of how unforeseen events can sabotage your golden years.

The greatest single hazard is what planners call “longevity risk” – the possibility that you may outlive your money.

Actuaries tell us that a woman who is now 65 can expect to live, on average, to 88, while a man can look forward to reaching nearly 86. Remember, though, that those are averages – about half of retirees will outlive those figures. In fact, if you are now a 50-year-old woman, there is nearly a 10 per cent chance that you will live to celebrate your 100th birthday.

How do you plan for a retirement that may be as long, or longer, than your working life? For the dwindling number of Canadians who are members of defined-benefit plans with automatic cost-of-living adjustments, there’s little to worry about. For most of us, though, there is a lot of risk in planning three decades ahead – especially given two additional hazards.

A good retirement plan should address longevity risk, inflation risk and market risk. Here are the pros and cons of three key risk-management tools:

Annuities

An annuity is essentially a contract with an insurance company, which guarantees to pay you a steady stream of income until the day you die.

Work

Taking a part-time job in the early years of your retirement can make a big difference to your financial picture. Earning even $4,000 a year replaces the income you could reasonably expect to generate from a $100,000 portfolio. It also provides a buffer against unexpected inflation.

Your portfolioare

Many people can achieve big gains from simply adjusting their portfolios to reduce the cost of investing and to ensure the right mix between income producers (like bonds) and more inflation-proof investments (like stocks).

The bottom line

It all sounds very intimidating – but doesn’t have to be. Despite their challenges, Uncle Jim and Aunt Mary never complained, but simply found ways to live on less.

How do you plan your retirement? Do you find this article useful? If yes, welcome to share it or you can leave comments if you have opinions. You may also send us a message for discussion.

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Sharpening strategic risk management

Sharpening strategic risk management

While conventional enterprise risk management (ERM) techniques have done a reasonable job in identifying and mitigating financial and operational risks, research shows that it is the management of strategic risk factors that will have the greatest impact on your ability to realise your strategic objectives. Bringing ERM into the forefront of strategic decision making and execution could thus give your business a decisive edge.

Strategic risks can be defined as the uncertainties and untapped opportunities embedded in your strategic intent and how well they are executed. As such, they are key matters for the board and impinge on the whole business, rather than just an isolated unit.

Strategic risk management is your organisation’s response to these uncertainties and opportunities. It involves a clear understanding of corporate strategy, the risks in adopting it and the risks in executing it. These risks may be triggered from inside or outside your organisation. Once they are understood, you can develop effective, integrated, strategic risk mitigation.

Far from holding back the business, strategic risk management is about augmenting strategic management and getting the full value from your strategy. In a typical instance, a conventional approach to setting and executing strategy might look at sales growth and service delivery. Rarely does it monitor the risks of a shortfall in demand.

Key questions for the board

  1. How well is my strategy actually defined?
  2. How broad are the risks that we are considering?
  3. What risk scenarios have we considered to test our plans?
  4. Have we mapped our risks to key performance and value measures?

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8 Risk Management Tactics Your Startup Should Have in Place

8 Risk Management Tactics Your Startup Should Have in Place

What is one risk management tactic you implemented during the early stages of your business to protect you and the company?

The following answers are provided by the Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

  1. Voice the Red Flags
  2. Hire a Tax Advisor
  3. Mind the Cash Flow
  4. Have Good Contracts
  5. Create an LLC
  6. Get Lean
  7. Insist on Down Payments

These strategies could be simple yet important. Do you have any thoughts? Post it in the comment box below or send us a message.

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