Never has Risk Management been more important than during our current time of crisis. This pandemic has created a strain on all businesses across all industries worldwide. Not only are companies faced with the task of keeping employees safe and healthy, but also maintaining the health of their business.
About Risk Management
As the saying goes; an ounce of prevention is worth a pound of cure. And this is exactly what risk management does; it shows you the possible pitfalls of the future so you will be prepared and in the best case scenario, been able to develop preventative actions for those risks. Of course, nobody could have been prepared for the scale of the current crisis, nor prevent its effect on his/her business. We are all affected. However, by Risk Management and having a proper Business Continuity Plan (BCP) and Recovery Plan (RP) in place, you can reduce the impact of this current crisis.
Benefits of good Risk Management
- Improves your organization’s ability to recognize and tolerate risks.
- Ensures the continuity of your business operations through the Business Continuity Plan.
- Strengthens your company’s ability to achieve set strategic business targets.
- Supports your company’s operational decision making and planning.
- Minimizes the negative impact of risks on your operations.
- In general improves your company’s operations, management, and control.
- Supports your organization to comply with different regulations, international laws and standards.
- Increases the confidence of your external stakeholders towards your operations.
You can have both your belt and suspenders on, but there will always be risks involved when doing business. It is unavoidable. The primary objective of risk management is to ensure that the risks facing the company’s business are identified, assessed, managed, and communicated promptly. During this current crisis, there has been a lot of discussions about “resilience” and what makes a company resilient. Analyses of the last big economic crash in 2008-2009 clearly showed that the resilient companies recovered from the economic crash fastest. This is one additional benefit of good risk management. It will make your company more resilient.
Companies and their leaders who take Risk Management as part of strategic and business planning activities are most likely to gain a competitive advantage. In this historical time caused by the current crisis, risk management should be on the top of every leader’s and manager’s task list.
What about risks in distribution centers and supply chains?
When it comes to risks that are specific to the food supply chain, you can pinpoint five risk categories:
- Demand management risks
- Supply management risks
- Service management risks
- Information management risks
Many of these risks can be minimized and even prevented by automation and digitalization. Cimcorp can help our customers to mitigate these risks with our solutions and deep application know-how.
There are some even more specific risk trends related to distribution centers that were already emerging but are now enhanced by the pandemic:
- The aging workforce
- Increased demand for e-commerce
- Labor shortages
- Health and Safety regulations
Futureproofing your business to address these risks often involves the implementation of automation to mitigate the risks to ensure the stability and growth of your business.
Customers like Kroger Dairy, Mercadona, and Martin’s Famous Bakery have invested in technology that has helped them manage the immense food supply chain demand occurring right now while also ensuring the health of their business for years to come.
Author Mika Martikainen
Read more about how these companies’ technology choices worked towards futureproofing their business.