Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016 - (Page 38)

It is important that there is a process in place for proper aggregation of risk information throughout the organization. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°94 - JUL / AUG / SEP 2016 Supply chain? 38 Not concerned? Trade-off the balance between transportation (operating expense), inventory (working capital) and service levels, that's the challenging three-headed monster in supply chains management. In recent years, those chains have become more complex around the world and faced natural disasters, financial crises, unstable local politics, poor visibility among suppliers multiple tiers and more-stringent regulation. This has caused companies to be more concerned by their current supply-chain practices and reevaluate how they can better plan for the worst than decide on the fly. Enterprise Risk Management (ERM) frameworks and other holistic risk management approaches have been developed by a growing number of organizations. Those programs make it easier for companies to focus on the root causes rather than on the symptoms of disruption in their business operations and then preventing such disruptions over the long term. It is important that there is a process in place for proper aggregation of risk information throughout the organization. Process in which the use of advanced analytics, Big Data, data-driven techniques and tools will enhance management's judgement, and will help assure company boards that disruptions are being kept to the barest minimum. However, this cannot be just done in one day, and some basic proactive risk practices can significantly improve the level of control on suppliers risks in your organizations : 1) Assess the risk landscape. Use tiered risk assessments that establish the likelihood and impact of a risk event from suppliers. Develop risk mitigation strategies for each supplier tier and a risk governance model that establishes roles and responsibilities for executives and employees. 2) Deploy comprehensive supplier reviews. Periodically review risk control practices of existing suppliers and a verification process to qualify new suppliers. 3) Deploy risk metrics. Create Key Risk Indicators to set up internal alerts for supply chain. 4) Report on risks internally. Set up a process to monitor risks in your supply chain, collect the information about the risks and report on them. 5) Improve continuously. Assess your risk monitoring and governance frequently and close gaps in those systems. But those risk practices and business continuity plannings should be reviewed in tandem with insurance coverage in place or to be put in place. Indeed, what is called the "contingent business interruption" (CBI) clause in property insurance policies can cover the loss of gross profit and extra expenses as a result of physical damage to the premises of a supplier or a customer. Understanding where CBI coverage starts and stops is key, as well as capturing the exact extent of the cover purchased in response to your needs . Does it apply to direct and indirect suppliers ? Does it include the utilities providers (such as electricity, gas and the like)? What kind and level of retention or deductibles apply in case of a loss ? Does the cover provide All risk approach or only for specific named perils ?

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW Philippe Gelis - Kantox - Fintech and the future of banks
FOCUS
Lost in transformation
Everything has a price – a transfer price
Treasury Survey - an unprecedented picture of treasury activities in Luxembourg
FORUM
The impact of negative rates on Treasury and Risks Management Systems
Towards reporting harmonisation?
Understanding the Treasury impact of BEPS
Impacts of Single Resolution Mechanism and Bail-in for European Banks
Supply chain? Not concerned?
Collateral management and the Corporate Treasury function.
Efficiently Managing Cross-Border Payments in Turbulent Times
CORPORATE FINANCE
How Mid-Market Companies Can Efficiently Manage Enterprise-wide FX Risk as they Grow
Investing surplus cash in repos
A wind of technology changes in the treasury management world
Invoicing can be fun….?
Comment améliorer la performance des fonds de pension européens
15 MINUTES WITH O2Finance
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016