Linda Conrad of Zurich Insurance explains the risks and opportunities posed by global supply chain changes.
What would you do if your steel fabricator for five projects suffered a catastrophe? Be it financial collapse or a devastating hurricane, it poses a significant risk to your projects and profitability.
Linda Conrad, Zurich Insurance, and Don Nabor, Gilbane Building Company, presented a session on weak links in the global supply chain at AGC's Surety Bonding and Construction Risk Management meeting.
They explained that natural and man-made catastrophes are occurring much more frequently than ever before, from tsunamis to earthquakes to market collapse. Since suppliers can easily be located in areas affect by these kinds of disasters, companies need to start planning for these kind of external factors when developing their risk management program.
Additional supply chain risks exist, including regulation changes and damage to company reputation. In addition, increased competition among subcontractors brings new players to the table, forcing a learning curve.
And as new interest in Lean practices and cutting inventory risks grows, contractors will face a greater chance of running out of supplies when supply chains fail. Risk is neutral, according to Conrad, and can be a threat or opportunity.
Both Conrad and Nabor urged attendees to consider the global supply chain a financial issue, instead of just a purchasing issue.
For more information contact Monica Cardenas at (703) 837-5364 or cardenasm@agc.org
