fusion point research Marketing Research Reports

Marketing to Risk Management in Manufacturing

Understanding Their Role

All business activities involve risk. Risk managers assess, quantify and develop plans to mitigate these risks. The process of risk management in manufacturing has grown in importance in recent years, following the financial crisis, natural disasters and major supply chain disruptions. Companies are now considering enterprise-wide risk management and these issues are reviewed at senior executive and board levels.1 At its best, risk management professionals are involved in strategic decision making for the company and proactively work to control and mitigate risk across all business functions. However, risk manage is also relegated in many companies to “insurance buyers” or the department brought in at the end of a project to “throw cold water on a hot project.”2

 

Major risk areas vary by organization, but common concerns include:

 

  • Regulatory risk – large manufacturers are global business with diverse product portfolios and they must understand and comply with all regulations in their countries of operation.3
  • Supply chain risk – manufacturers rely on extensive, global supply chain networks and must plan for disruptions in the flow of critical materials.4
  • Physical risk – including natural disasters, political instability and security breaches.5
  • Product liability – due to defects in design, manufacturing, supply chain errors or labeling mistakes.6
  • Employee health and safety – especially risk in production facilities and in the transportation of goods. In addition, manufacturing sometimes involves hazard materials requiring an intense focus on worker safety, compliance and proper disposal.7

 

Risk managers in manufacturing organizations are responsible for risk mitigation by:

 

  • Assessing all relevant risk across the entire product portfolio and all applicable geographies.8
  • Developing mitigation plans including training, rules & procedures and compliance audits.9
  • Quantifying and prioritizing major risk areas.10
  • Using insurance and other financial instruments to share and hedge risk.11

“The first thing I would say is that anyone who is in business is a risk taker. Private enterprise is not for the faint of heart.”

- A.G. Lafley, former CEO of Procter & Gamble12

1 Burchill, Jeffrey. “CFOs Need to Be at the Center of Risk: With Risks around Every Corner, CFOs Need to Keep a Broad View to Protect the Enterprise and Build a Resilient Organization.” Financial Executive, 2013. HighBeam(336617658).

2 Widmer, Lori. “Is Risk Management Obsolete? The Last to Be Consulted and the First to Be Blamed, Risk Management Has Struggled to Show Its Relevance.” Risk Management, 2013. HighBeam(325174877).

3 BLANCHARD, DAVE. “Teamwork and Technology Help Avnet Take Control of Risk.” Industry Week/IW 262, no. 8 (2013): 42. EBSCOhost(89751191).

4 Bode, Christoph, Denis Hubner, and Stephan Wagner. “Managing Financially Distressed Suppliers: An Exploratory Study.” Journal of Supply Chain Management, 2014. HighBeam(384779137).

5 Stillman, Enan E., and Alexis Summers. “Don’t Be the Weak Link in Supply Chain Risk Management: Here’s What You Need to Know about the Latest Government and Corporate Efforts to Mitigate Supply Chain Risks at Home and Abroad.” Material Handling & Logistics , 2013. HighBeam(352849239).

6 Davidson, Kristi A. “Risk Management 101: Manufacturing and Distributing Products.” HFN Home Furnishings News , 2013. HighBeam(351613941).

7 Stillman, Enan E., and Alexis Summers. “Don’t Be the Weak Link….”

8 Wade, Jared. “Procter & Gamble’s Former CEO on Risk and Strategy.” Risk Management, 2013. HighBeam(322329672).

9 BLANCHARD, DAVE. “Teamwork and Technology….”

10 Bakliwal, V. K. Production and Operations Management . 1st. ed. MARK PUBLISHERS, C-390, Ist Floor, Amrapali Circle, Vaishali Nagar, Jaipur-302021, Ph.: 9413678649, E-mail: markpublishers@ymail.com: MARK PUBLISHERS, 2011.

11 Widmer, Lori. “Is Risk Management Obsolete? The Last….”

12 Wade, Jared. “Procter & Gamble’s Former CEO on Risk and Strategy.”

Feedback?

Not Required

Submitting Form...

The server encountered an error.

Message received. Thanks!

Copyright © 2016 Fusion Point Research, Inc.

Risk management is the process of identifying, assessing, prioritizing and mitigating risk. The function varies by organization, but risk management has grown in importance over the past several years due to several global disruptions.
fusion point research Marketing Research Reports
Risk management is the process of identifying, assessing, prioritizing and mitigating risk. The function varies by organization, but risk management has grown in importance over the past several years due to several global disruptions.
  • – large manufacturers are global business with diverse product portfolios and they must understand and comply with all regulations in their countries of operation.
  • – manufacturers rely on extensive, global supply chain networks and must plan for disruptions in the flow of critical materials.
  • – including natural disasters, political instability and security breaches.
  • – due to defects in design, manufacturing, supply chain errors or labeling mistakes.
  • – especially risk in production facilities and in the transportation of goods. In addition, manufacturing sometimes involves hazard materials requiring an intense focus on worker safety, compliance and proper disposal.
  • Assessing all relevant risk across the entire product portfolio and all applicable geographies.
  • Developing mitigation plans including training, rules & procedures and compliance audits.
  • Quantifying and prioritizing major risk areas.
  • Using insurance and other financial instruments to share and hedge risk.