Today's global supply chains are delivering products and services to market better, faster, and cheaper than ever before. Yet these advances have also increased the likelihood and impact of supplier and supply chain disruption risk. The potential negative impacts of a disruption are gaining C-suite and board-level attention given current global economic uncertainty, which has exposed significant gaps in business resiliency.

Marsh Risk Consulting's unique, proprietary solutions can help companies in their efforts to re-evaluate business strategies,  gain a better understanding of the critical interdependencies and supply chain risks along the way — from the sourcing of raw materials to delivery to the customer — and appropriately manage or transfer risks. 

Supply chain risks include everything from natural hazards, terrorism, pandemics, and data security to demand variability and supply fluctuations. Fierce competition and tight margins can further magnify the impact of a supply chain failure on a business. Today’s economic pressures exacerbate supply chain-related risks particularly in relation to supplier viability given tightening credit markets, downward pressure on costs, and shrinking consumer markets.  

Marsh Risk Consulting's Supply Chain Risk Management (SCRM) Practice offers three primary solutions that are tailored to organizations' unique supply chain risk management needs and designed to help organizations ensure that:

• the supplier relationships they rely on will still be there when needed;
• supply chain risk management strategies are risk intelligent, agile, and resilient; and
• they can maximize risk management investments in viable and efficient practices.

Supplier Risk Viability

Our Supplier Risk Viability solution aims to address a company's concern with the overall viability of specific suppliers especially in today's economic environment. This service helps determine which of the organization's suppliers are vulnerable to various risk categories using risk modeling techniques and other quantitative indicators. This service can also measure suppliers’ compliance with industry requirements, best practices, and specific supplier policies.

Marsh has identified a comprehensive range of Supplier Risk Viability dimensions against which suppliers should be evaluated. While we believe that all eight dimensions are important for a complete view of an organization’s suppliers, we provide clients with the flexibility to choose the key categories they believe are most relevant to each supplier. Clients may select one or numerous suppliers to include in the scope of work and this solution may be used on a one-time or on-going basis to evaluate supplier viability.

Our Supplier Risk Viability dimensions include:

• economic/financial;
• labor and health;
• criminal and terrorist;
• natural hazards;
• environmental and human-caused;
• political and social;
• reputation and brand; and
• transportation, infrastructure, and logistics.

Supply Chain Risk Diagnostic

Marsh provides a Supply Chain Risk Diagnostic to enable organizations to make better, risk-informed decisions regarding the suppliers, supplies, and services that constitute the end-to-end supply chain and drive businesses in general. The Supply Chain Risk Diagnostic evaluates a client's supply chain exposures and provides the framework for developing a customized risk transfer and mitigation approach.

This is accomplished through:

• a value segmentation exercise to help organizations select the key product or service for supply chain risk identification;
• documentation of the suppliers, supplies, and services that comprise the critical resources of the organization’s supply chain;
• identification of risks, triggers, and current mitigation strategies with a financial quantification of the impact of disruptions to suppliers, supplies, and services; and
• prioritization of supply chain risks so that mitigation and transfer options can be appropriately considered.

The Supply Chain Risk Diagnostic is a prerequisite to pursuing Global Supply Secure (GSS) and related non-physical damage business interruption insurance coverages, which are designed to protect companies whose operations rely on critical supplies of goods or raw materials. GSS, and similarly innovative supply chain coverages, are stand-alone products that attempt to fill voids in traditional property-focused coverages and should be viewed as complementary to other insurance products.

Supply Chain Risk Surveillance

Supply Chain Risk Surveillance is designed to help companies better understand potentially critical failure points along the supply chain and help allocate risk management capital, time, management attention, and resources appropriately to achieve adaptive and resilient supply chains. The service includes continuous monitoring of geopolitical threats, allowing for better response to sudden events and for staying abreast of the changing business landscape by tracking risk profile changes over time.

As part of this service we help organizations to:

• identify and prioritize what is most critical to the business such as a critical brand, product, or service (value segmentation);
• document the end-to-end supply chain to illuminate dependencies, the sometimes hidden interdependencies, and the skills generally required to maintain operations (supply chain map);
• identify the most significant potential points of failure in the supply chain; and
• dynamically monitor supply chain risk through a global dashboard that matches critical resources along the supply chain to an intelligent source of data that alerts organizations to significant geopolitical changes 24 hours a day, seven days a week and provides information on the threat, severity, or geography of an event.

CONTACTS:

Gary Lynch
Global Leader, Supply Chain Risk Management Practice
212-345-6053

Andrew Staniar
978-443-4680

Marc Cerro
518-793-4817

Related Information

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Risk Talk: Building a Resilient Supply Chain