Why manufacturers need to plan for a new risk environment

Only 30 per cent of manufacturers are confident in their ability to grow and prosper in 2020, new research has found.

Hardly surprising, since an extremely high 84 per cent believe that they will be operating in a high risk environment next year, according to the study, which was carried out by CNA Hardy.

These figures reflect the tough trading conditions facing manufacturers thanks to global trade wars and ongoing uncertainty over Brexit.

The tricky conditions mean that many manufacturers (60 per cent) are turning to technological innovation as a potential avenue to increase productivity and drive growth.

But technological innovation comes with its own challenges, and manufacturers now say that cyber and technology threats will be the number one risk in 2020, knocking political risk off of the number one spot.

Other risks keeping manufacturing companies up at night include compliance and regulation risks especially when considered in the light of economic shifts and ongoing political tensions.

An increase in the disruptive effects of technology, alongside changes to government policies and regulation, are pushing Adaptive Capacity up the corporate agenda, according to a BSI study,

Those surveyed in BSI’s annual organisational resilience index, identify technology as both the greatest opportunity and most severe threat to their success.

Howard Kerr, Chief Executive at BSI, said: “While we have seen a changing emphasis in Organisational Resilience in the past, this year reveals a decline in organisations’ ability to adapt to change.

“In order to survive and prosper, business leaders must be aware of issues on the horizon and remain vigilant in ensuring that they – along with their teams – are focused on strategic priorities.”

The danger, according to CNA Hardy is that as risk managers and the c-suite focus on planning for political upheaval and keeping cyber risks in check - other risks could fall by the wayside.

The report warned: ”The danger as we look to 2020 is that in all the noise over Brexit and the shift to greater reliance on technology, manufacturers will de-prioritise risk mitigation in traditional areas such as corporate and supply chain risk. 

“Trading conditions in 2020 will not be easier than in 2019. Manufacturers will need to be prepared to improve on risk management if they are to thrive in the risk landscape.”