Companies in the global industrial and materials industry face three specific global risks: economic turmoil, commodity pricing fluctuations and business interruption, which includes supply chain disruption, according to a new study from Aon.
Natural disasters and other catastrophes—flooding in Thailand and Japan’s earthquake, tsunami and nuclear disaster—have forced automotive, metals, construction/agricultural equipment, building materials, industrial machinery and defense contractors, to change the way they view and prioritize resources for risk response, according to the “2012 Industrial and Materials Industry Report” released by Aon Risk Solutions.
“These events served as a wake-up call for all organizations to more carefully evaluate the interdependencies of their global operations,” said Mike Stankard, managing director of the Automotive and Industrial and Materials Practices for Aon Risk Solutions in a press release. “It is more important than ever for organizations to embrace an enterprise-wide approach to managing risk and optimize that strategy on a global basis.”
According to the report, the range of risk issues faced by the industry is widening for a variety of reasons: Demand forecasting has been difficult due to the glacially paced economic recovery in the United States, the continuing economic crisis in Europe and China’s economic slowdown; commodity price volatility is increasing, which affects cost structures, budgets, inventory and production costs; and the increasing complexity and interdependence of global supply chains, rapid and disruptive technology developments and the outsourcing of component parts and offshore production has exacerbated the problem.
Other findings in the Aon Risk Solutions 2012 Industrial and Materials Industry Report include:
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access