UPS Capital - Sponsored Study Shows Supply Chain Risk Mitigation Strategies Lacking
July 17 2014 - 10:00AM
While many supply chain executives are well aware of the risks
facing their supply chains and the undesirable consequences, many
are still not developing and executing strategies to properly
manage identified risks. This finding is according to a new study,
Managing Risk in the Global Supply Chain, sponsored by UPS Capital®
Corporation, and conducted by the Global Supply Chain
Institute at the University of Tennessee.
UPS Capital (www.upscapital.com) is a business
unit of UPS® (NYSE:UPS) that enables smarter trade through cargo
and parcel insurance1, trade finance2 and payment solutions3. One
of the studies major findings was, of the 150+ firms surveyed, 90
percent did not formally quantify supply chain risk when
outsourcing production, and not one of the surveyed participants
used outside expertise to help assess supply chain risks.
"We were surprised by some of the findings
regarding the lack of mitigation strategies," said Dr. Paul
Dittmann, executive director of the Global Supply Chain Institute
and the study's author. "The supply chain is one area of a company
where executives are faced with balancing operational efficiencies,
all without actually having direct control over many of the moving
parts, thus making risk mitigation strategies almost essential to
operations. Any business that does not have some basic form of risk
mitigation plans in place is simply gambling with its
existence."
This study also yielded other important
findings, including that most participants' companies have risk
managers somewhere in the company, often in the legal and finance
areas. However, most of these risk managers are not aligned to
supply chain risks, resulting in significant gaps in companies'
overall mitigation strategies.
"We all know the threats are very real, and
there are multiple ways to mitigate risk," said Dave Zamsky, vice
president of marketing for UPS Capital. "While supply chain
executives acknowledge insurance as a major way to mitigate losses,
it is not on their radar screens. Two of the easiest risk
mitigation strategies to implement are financial and insurance
solutions. Providers like UPS Capital have a vested interest in
helping businesses avoid losses and prepare for the unknown with
products like our Flexible Parcel Insurance and Cargo Insurance. In
addition, financial services such as UPS Capital's Cargo Finance®,
Global Asset Based Lending (GABL), or Credit Insurance offset risks
and improve cash flow. A properly structured loan or other
financial bridge can help reduce a company's financial risk and
protect the bottom line with minimal operational changes."
About the Study
The study encompassed a quantitative survey of
more than 150 supply chain executives and qualitative interviews
with executives from six companies. The companies surveyed included
both interviews and written responses. Companies ranged in size
from $300 million to $80 billion and covered a cross section
of industries.
Download a copy of the full study online at
https://www.upscapital.com/solutions/insights.html , or contact
Irene Moore, UPS Capital (O: 404-828-4105) for more information.
You can also visit the University of Tennessee's Global Supply
Chain Institute website:
http://globalsupplychaininstitute.utk.edu/publications/documents/Risk.pdf
website.
About UPS
UPS (NYSE: UPS) is a global leader in logistics,
offering a broad range of solutions, including the transportation
of packages and freight; the facilitation of international trade;
and the deployment of advanced technology to more efficiently
manage the world of business. Headquartered in Atlanta, UPS serves
more than 220 countries and territories worldwide. The company can
be found on the Web at ups.com®, and its corporate blog can be
found at blog.ups.com. To get UPS news direct, visit
http://www.pressroom.ups.com/.
1 Insurance is underwritten by an authorized
insurance company and issued through licensed insurance producers
affiliated with UPS Capital Insurance Agency, Inc., and other
affiliated insurance agencies. UPS Capital Insurance Agency, Inc.
and its licensed affiliates are wholly owned subsidiaries of UPS
Capital Corporation. Insurance coverage is not available in all
jurisdictions.
2 Loans made in California are subject to a
Department of Corporations California Finance Lenders
License. Products may not be available in all areas and
may be modified based on requirements. Check with your
UPS Capital representative for local
availability. Credit availability is subject to
approval.
3 All services in connection with the UPS
Capital Merchant Services Program are provided by Chase
PaymentechTM and all fees charged for services are determined by
Chase Paymentech. All decisions regarding approval will
be made solely by Chase Paymentech under Chase Paymentech's then
current criteria.
© 2014 United Parcel Service of America, Inc. UPS, the UPS brand
mark and the color brown are trademarks of United Parcel Service of
America, Inc. All rights reserved.
# # #
CONTACT: Irene Moore
404-828-4105
imoore@ups.com
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