Supply Chain Brain - Avoiding Pitfalls in an Integrated World

Transcription

1 Supply Chain Brain - Avoiding Pitfalls in an Integrated World Webinar for Arthur J. Gallagher & Co. April 20, 2017 Presented by: Nigel Henley and Michael Speer EY Insurance & Federal Claims Services

2 Welcome Bart Douglas, AIC Area Senior Vice President South Florida Branch Managing Director Gallagher Claim Advocacy Practice Group Page 1

3 Presenters Nigel Henley, EY, Dallas, TX Michael Speer, EY, Chicago, IL EY Insurance & Federal Claims Services Practice supporting policyholders with: Business interruption and property insurance claims Pre-loss planning and analysis of BI values and exposure FEMA Public Assistance and other federal disaster grant recoveries including post-audit assistance and support Preparedness and resiliency services for state and local government Page 2

4 Introduction The reliance on complex and expanding supply chains has increased risk management exposures. Risk Managers and their brokers need to understand how their supply chain is changing, assess the risk, proactively manage the risk, and determine the opportunities for mitigation or transference. Page 3

5 Focus on Supply Chain Risk Catastrophic events in recent years have made companies increasingly aware of the exposures created by the dependencies in our supply chains. Page 4

6 Gaining a Greater Perspective Page 5

7 Supply Chain Risk Assess Manage Mitigate Transfer Page 6

8 Assess Supplier Risk Number of suppliers: How well do you know and understand your Tier 1 and/or Tier II suppliers Where are suppliers located? What are your supplier Risks? How are your supplier and external manufacturer contracts structured? Risk profile of key suppliers and potential loss scenarios Page 7

9 Assess Supplier Risk (Continued) Specialization of items supplied Geographic dispersion of suppliers and external manufacturers Ability to resource parts within a supplier s own network Supplier capacity utilization available excess capacity Internal capacity utilization vs reliance on external manufacturers Page 8

10 Manage Supplier Risk Proactively identify potential risks and loss scenarios: Production disruption to various tiers of suppliers Logistics interruptions Upstream Risks (risks of loss of business/customers) Page 9

11 Manage Supplier Risk (Continued) Build in redundancy to suppliers or within a supplier: Time needed to qualify new suppliers Increased inventory of key components Monitor key supplier business continuity planning process test it Page 10

12 Mitigate Supply Chain Risk Understand opportunities to diversify supplier risk Consolidate supplier risk where appropriate Partnership Page 11

13 Transfer Supply Chain Risk Contingent business interruption / dependent time element insurance Transit Insurance Supplier/External Manufacturing Contracts insurance / liability Are you a named insured on your supplier s insurance policy? Page 12

14 Supply Chain Risk The Big Picture Page 13

15 Avoiding Pitfalls Lacking knowledge and/or visibility on the complete supply chain and external manufacturing network Assuming systems are set up to capture or maintain documentation that will be needed to transfer or mitigate risk Not having full understanding of insurance coverages that address supply chain risk and their applications Page 14

16 Q & A Michael Speer EY Liaison with Arthur J Gallagher s Claim Advocacy Practice Group Insurance & Federal Claims Services Ernst & Young Chicago, IL Michael.Speer@EY.com Nigel Henley Insurance & Federal Claims Services Ernst & Young Dallas, TX Nigel.Henley@EY.com Page 15