Class #1 Flashcards
Umbrella liability policy what
Umbrella insurance is extra liability insurance. It is designed to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future.
Three purposes of umbrella liability policy
- It provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims;
- It drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims;
- It provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).
Supply Chain Risk Management (SCRM) - why is it important?
- increasing reliance on other entities for company’s success
- historically businesses expend 1/3 of budget on goods and services from outside vendors (3 rd parties)
- today many companies spend over 2/3 of their budget on outside goods and services
Efficiency advantages from reliance on other entities for company’s success
- Globalization
- Outsourcing
- Just-in-time (JIT)
Just-in-time (JIT) what?
an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires producers to forecast demand accurately.
Increasing reliance on other entities for company’s success - REASONS
- due to efficiency advantages
- additional regulatory compliance – both
- increased levels of economic uncertainty
- shorter product life cycles / rapid technological change
- demanding customers
- supply side capacity constraints – think of time constraints
- consolidation of operations to gain economies of scale
Result of increasing reliance on other entities for company’s success
Supply Chains are more fragile/brittle than ever before. Need to handle that increased risk
Supply Chain Risk definition
The likely hood and consequence of loss events at any point in the end-to-end supply chain.
Where to start when identifying supply chain risk
- typically good starting point is the risk management process.
- as with all risk management it is important to find the cement trucks and prioritize - costs, time, raw materials. Scarcity is a big hazard therefore you need to make sure that if one of your suppliers fails, you need to have a backup plan.
Effective team would include members from areas within the business focused on:
♠ Business continuity - sales, customer services ♠ Engineering and design ♠ Finance ♠ Compliance - typically regulatory ♠ Logistics ♠ Manufacturing ♠ Procurement - finding raw materials ♠ Quality control ♠ Security ♠ Senior management
The importance of having senior management included in the supply chain risk analysis.
- best if members are responsible for their area
- results in better “buy in” to process
The supply chain risk analysis team must be…
♠ embedded in the company culture to be effective
♠ should meet regularly - discuss risks - changes in environment - effects on contingency plans - conduct simulations / tests
♠ Y2K example
Effective SCRM
- Provides revenue because you protect your sales - by being proactive you avoid litigation
- You have competitive advantage - you do not want to become the weak link in your customers supply chain.
- Identifies areas of operational cost savings internally
Intangibles definition (Notional Supply Chain Process Flow)
What else exists for that supplier that might knock them out. For example, huge legal liability.
Why do we consider the Customers? (Suppliers and Production / Manufacturing)
- Better customer relations
- Anticipate future needs and therefore areas of demand for your business
- Assist in consumers planing - build a relationship
