(216) 609-3940
SandRun Risk
  • Home
  • What We Do
    • Risk Management
    • Insurance Claims
    • Insurance Archaeology
  • Blog
  • About
    • Team
    • Our Company
    • Articles
  • Contact

​Studying Resilience:  The Outcome of Good Risk Management - Part I

3/4/2018

0 Comments

 
Picture

​One of the best parts of serving as executive director of The Risk Institute at The Ohio State University Fisher College of Business is helping to bridge the gap between academia and corporate practitioners. 

Picture
​Committed to generating new insights and influencing the adoption of leading risk management practices, The Risk Institute sponsors funding for research ─ area-specific and interdisciplinary ─ seeking to discover and advance risk management concepts that organizations can use to leverage risk management to create value. 

Each year we fund more than $100,000 of leading-edge risk research and we also conduct one of the industry’s premier risk management surveys, polling more than 500 risk management practitioners across a broad cross-section of industries.  The surveys and research can be found at The Risk Institute Research Hub; current areas of focus include fraud and ethics, protectionism, macroeconomic consequences of demographic change, weather and climate risk, longevity risk, and digital risk.

The purpose of this three-part article is to share our university research on the concept of resiliency from two perspectives.  The first two parts of the article will share our research on risk and supply chain dynamics.  The third part of the article focuses on resiliency and cyber risk.

In an interconnected, volatile, global economy, supply chains have become increasingly vulnerable. Disruptions — even minor shipment delays — can cause significant financial losses for companies and substantially impact shareholder value. Globalization has made anticipating disruptions and managing them when they do occur more challenging. The potential risks of disruptions are often hidden, and the potential impacts may not be understood, which often results in black swan events – events that can only be fully understood after the fact. 

Although companies originally moved production offshore to countries such as India and China to take advantage of lower labor costs, events like Iceland’s 2010 volcanic eruption and the Japanese tsunami in 2011 have shown that the vulnerabilities of extended supply chains are real and serious. For example, according to the U.S. Federal Reserve, 41% of Minnesota manufacturers said that Japan’s tsunami had affected them negatively. As a result, many manufacturers have reevaluated their sourcing options, and some are shifting operations back to their home markets. While these companies perceive other advantages to reshoring, including improved responsiveness and domestic job creation, reducing their exposure to risk has been an important driver. 

The reality is that supply chain practices designed to keep costs low in a stable business environment can increase risk levels during disruptions. Just-in-time and lean production methods, whereby managers work closely with a small number of suppliers to keep inventories low, can make companies more vulnerable due to the lack of buffer capacity.

Over the last seven years, researchers at The Ohio State University have been exploring the concept of enterprise resilience, i.e. how companies can prosper in the face of turbulent change by being able to recognize, understand, and compensate for vulnerabilities. The result is the SCRAM (supply chain resilience assessment and management) framework, which enables a business to identify and prioritize the supply chain vulnerabilities it faces, as well as the capabilities it should strengthen to offset those vulnerabilities. Part II of this article provides an overview of the SCRAM approach.

Phil Renaud
Email:  renaud19@osu.edu

0 Comments



Leave a Reply.

    Authors

    Lori Siwik and Mark Siwik are the founders of SandRun Risk.  They apply the principles of vertical leadership and lean six sigma to the discipline of risk management.  From time to time they share their blog with guest authors who write about important risk management principles.

    Categories

    All
    Insurance Claims
    Mergers And Acquisitions
    Risk Management

    Archives

    May 2022
    December 2021
    September 2021
    August 2021
    July 2021
    June 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    June 2017
    May 2017
    March 2017
    December 2016
    November 2016
    October 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    June 2015
    May 2015
    April 2015
    March 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    May 2014
    April 2014
    March 2014

    Categories

    All
    Insurance Claims
    Mergers And Acquisitions
    Risk Management

    RSS Feed

What We Do.

Risk Management
Insurance Claims
Insurance Archaeology

Blog.

About.

Team
Our Company
Articles

Contact.

Legal.

Privacy
Terms of Use
 
Copyright ©2014 | 4199 Kinross Lakes Parkway, Ste. 275 Richfield, Ohio 44286 | 216-609-3940 | info@sandrunrisk.com