Supply chain still vulnerable to natural catastrophe risk says Willis

Businesses continue to leave themselves wide open to supply chain disruption after failing to learn lessons from natural catastrophes in Thailand and Japan.

Following last year’s series of natural catastrophes highlighting exposures due to stretched supply chains, businesses have been focussing on improving risk assessments and identifying areas of critical dependencies.

But according to Tom Teixeira, Practice leader at Willis, despite the Japanese earthquake and Thai floods “there are still a number of sectors that have not changed their approach to supply chain management.”

He went on to say that a number of companies’ exposures remain wide open because of a lack of interaction between risk managers and organisations’ procurement and sourcing functions: “In many of the companies I talk to there is no interaction or regular dialogue between group risk and procurement.

“In order to get better risk management in place there has to be close collaboration between the risk management function and the procurement function. For us to get get the best risk assessment solution in place, followed by the actual risk management solution, you need both to be working closely together.”