Creating a Watertight Logistics Risk Management Policy in the Current Climate
The world is more connected than ever, with goods transported huge distances every day. But with this interconnectedness comes a unique set of challenges. It doesn’t take a lot to put a stick in the spokes of your logistics company, with supply chains at the mercy of climate change, destabilised countries, and pandemics that touch every corner of the globe. This is why creating a watertight risk management policy is the key to ensuring uninterrupted business. This article will look into what you can do to create a risk management policy that protects yourself and your business.
If you’d like some advice from an experienced broker on risk management and considerations for your business operating in the logistics sector, contact Dover Street Insurance Brokers. We’ve worked with businesses throughout County (optional), offering expert, unbiased advice and support. Get in touch by calling 0208 057 4130.
What is a risk management policy?
A risk management policy is a statement used by companies and businesses to identify and respond to possible risks in their sector that could harm their business and can be used to minimise the potential impact of these risks. It can provide guidance, protect staff, recover costs and ensure financial health. Risk management plans allow you to prepare for the worst, absorbing some of the blow if that worse should happen.
What are some of the risks?
There are many potential risks for your company, including data breaches, system failures and natural disasters. The most critical risk to guard against could easily be the supply chain. If a business’s supply chain is at risk then the rest of the business is also at risk. With no products arriving, the business grinds to a halt, profits fall, morale plummets and the business could very well go under.
If you’d like some advice from an experienced broker on risk management and considerations for your business, contact Dover Street Insurance Brokers. We’ve worked with businesses throughout County (optional), offering expert, unbiased advice and support. Get in touch by calling 0208 057 4130.
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Use the PPRR risk management model
The PPRR risk management model stands for Prevention, Preparedness, Response, and Recovery. It allows you to take precautionary measures, develop a plan, execute your plan and resume operations as soon as possible.
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Diversify your supply base
There is always a chance that issues will arise with your supply chain, and one way of mitigating that problem is to diversify your supply base. Using a range of hauliers, suppliers and production outlets means that if one fails, the others will be able to pick up the slack, causing minimal disruption to your business.
Have backup suppliers
There is also the possibility that a supplier is unable to fulfil their role in the supply chain, whether that be down to high demand or issues with their own supply chain. Having a backup supplier will again minimise the disruption, but only once you have entered into discussions with them. Making sure they are able to hold back their reserve for you is key, as is communication.
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Improve supply chain visibility
Supply chains have many different links, each as important as the one before, and each has its own specific risks and challenges. If there is an issue with one of these links, you want to know about it as soon as possible so you can make changes and mitigate the disruption. Supply chain visibility means knowing where the inventory is at all times during its journey along the supply line. Constant communication and vigilance are required to keep ahead of all developments.
Get an Insurance policy
Even if your risk management is watertight, there can always be unforeseen problems, some of which can impact only you and others that impact the whole world. Having an insurance policy designed for any and every eventuality will allow you and your staff to have peace of mind should the worst happen.
Logistical issues are a part of the global landscape. But having a risk management plan allows businesses to be able to plan for these eventualities and minimise the possibility of disruption. If you need information regarding what makes a good plan, talk to an insurance broker today, and help your business keep operating.