Listen to: "Top 4 Types of Risk Impacting Manufacturing Companies"
Manufacturers face a greater lineup of potential risks today than at any other time in history. More sophisticated equipment, rapid growth, and a need to gain a competitive edge means that production and logistics have to work seamlessly. Delays that might not impact a business in another vertical can be devastating to a manufacturing brand. Depending on what is being made, for example, interruptions in continuity could damage delicate or perishable raw materials or cause late shipments that antagonize customers.
4 Types of Enterprise Risk Impacting Manufacturing Companies
Learning more about the specific areas of risk manufacturers face will help ensure you are prepared and ready for any eventuality.
1. Technology and Cybercrime
Applications and software have become more sophisticated than ever, but the sheer number of connections and the number of IoT endpoints most manufacturers have means that your organization faces a greater risk of exploitation. IoT devices can boost efficiency at all stages of the manufacturing process, but they also create entry points that could potentially offer access to your network. Attention to data security and protection is a must for any manufacturer. If you accept credit cards for order payments, you may also be an appealing target for cybercriminals, as cardholder data is coveted and easily exploited.
According to Forbes. the typical company faces dozens of distinct cybersecurity risks in 2020, so attention to this critical area of risk is essential, no matter what product you create or service you provide.
Not sure what risk you face when it comes to cybercrime? Learn more about the different ways criminals can attack and damage your business and you’ll be better able to protect your organization.
2. Business Interruption
You can’t prevent some forms of interruption from happening, yet human error can also cause a domino effect that greatly disrupts operations. Fire, flooding or other natural disasters, and even actions by your own employees can prevent your company from conducting business as usual.
If this happens and you do not have a plan to move forward without interruption, your entire business could suffer. Even a week of downtime can be devastating for your bottom line and will take months to recuperate. You can’t prevent natural disasters and other emergencies, but you can create a plan for business continuity. With a plan in place, if the worst happens, you’ll still be able to operate effectively. A continuity plan can help mitigate your risk and minimize the impact interruption has on the organization, but only if it’s formulated before something goes wrong.
3. Third-Party Failure
Your own business is in pristine shape and running efficiently, but you could still face problems if a third party disrupts your processes. The vendors you rely on for your raw materials, services and logistics can all have a significant impact on your own ability to deliver.
Third-party vendors also affect your ability to comply with regulatory issues and even your brand reputation, so you must have a way to assess risk. Moving forward with a Third-Party Risk Assessment can help you spot signs of trouble or potential exposure that could impact your brand.
Learning more about Third-Party Risk Management is essential if you rely on vendors for shipping, raw goods, technology and more.
4. Compliance Risk
The way your brand prepares for compliance with important regulations and laws will impact operations and even sales revenue. If you accept credit cards, then you need to be fully PCI compliant. If your company accepts orders from the European Union, then you also need to consider GDPR regulations moved into effect in recent years. Your industry will also have its own strict requirements to comply with, from healthcare’s HIPAA rules to environmental and financial standards. Failure to comply can cost your organization in more ways than one, from sanctions and fines to reputation issues and bad press.
Fully understanding the types of compliance risk a typical enterprise faces and the risks in your own industry can help you offset the compliance issues that plague most organizations.
Create an Effective ERM Strategy to Protect your Business
Since enterprise manufacturing companies face so many risk factors, you need a way to assess and understand just how much each of these risks impacts your organization. Understanding the specific risks your company faces allows you to fully prepare and avoid problems. Since every company is different, an assessment helps reveal the risks that are most relevant and impactful for your organization and allow you to properly prepare.
An Enterprise Risk Management (ERM) assessment is an essential first step towards protecting your brand from the risks described above.
Assistance with Enterprise Risk Management
If you are not sure what risks impact your company the most or you want to be sure you have prepared for any eventuality, we can help. Contact our team to assess the level of risk in each of the above areas and beyond. We can identify potential risks, then create an ERM strategy that addresses any vulnerable points. Your company will gain robust protection and decrease the risk of interruption.