even across supply chains. Identifying the sources and connecting the dots for likely collateral damage is critical. • Standardize your assessment scale: Use a scale from 1-10, with 10 having the most unfavorable consequences to the organization, split into five buckets to provide a high and low of each bucket (1-2, 3-4, 5-6, etc.). Using a 10 scale makes the math easy, and having only five buckets provides flexibility to those performing assessments. • Define objective evaluation criteria: Often, one person’s nine is another person’s seven. You need to provide clear definition on what each of the five buckets are in unambiguous terms. You can choose multiple ways of expressing severity, both qualitative and quantitative, such as financial, legal, strategic, yet only one of the criteria listed for a specific level has to be met in order to rate a factor at that level. This gives qualitative criterion a way to become quantitative and comparable across the enterprise. • Link risks to controls: Once you’ve identified the sources of risks and assessed them objectively, you need to know how your existing controls are actually covering these risks. First, link risks to corporate goals found in the strategic plans for your organization. Then, work with business areas to identify the goals each group impacts and which of the risks you identified are applicable to their operations. • Report and monitor effectiveness over time: By objectively assessing risk across your organization and connecting information to strategic goals, you can present information the board recognizes and understands. Report on your organization’s most critical risks and how assurance of risk coverage changes as you implement rootcause controls. www.foodlogistics.com
FLOG0418_38-41_Trade War.indd 41
Impacts of a Trade War The imposition of steel and aluminum tariffs by the Trump Administration will have direct and indirect impacts on U.S. companies. An example of a direct impact is the raw material import costs for U.S.-based producers of machinery and cars may rise, while comparable goods manufactured outside of the United States may become cheaper for American consumers. Consequently, manufacturing companies in the United States may see higher costs of goods sold and reductions in overseas (foreign) sales. An indirect impact would be that changes in production and prices will require modifications to sourcing and procurement methods. These sudden shifts may have an impact on product quality and availability, since some companies may experience supply chain problems when rapidly moving to reduce production in some areas while ramping up production in others. Performing operational risk assessments will effectively identify areas where change can have a positive or a negative impact on business operations. Risk assessments are essential for good performance. Companies must use risk assessments proactively through multiple layers of management, down to the front-
line supervisor and across business When groups and suppliers. Doing so will performed identify areas of possible concern regularly, before they’re a problem, facilitating assessments effective contingency planning. Risk as- connect sessments make connections between processes, seemingly unrelated processes and ac- products, tivities that will cause problems when suppliers and the business environment changes. customers When performed regularly across to help locations, assessments connect companies processes, products, suppliers and stay customers to help companies stay several several steps ahead by identifying the weakest links to monitor and capturing, steps analyzing and reporting early stages of ahead.” incidents before they get out of control. Ultimately getting the proper resources allocated to preemptively fix problems will identify opportunities due to change that competitors will miss because they are too busy reacting. Steven Minsky is CEO of LogicManager and author of the RIMS Risk Maturity Model.
ADVERTISER INDEX ADVERTISER............................................................................. PAGE
AFS Technologies...................................................................................... 29 Ford Motor Co......................................................................................... 2-3 Global Cold Chain Expo......................................................................... 19 GPS Insight.................................................................................................. 35 Great Dane Trailers Inc.......................................................................... 44 H&M Bay Inc............................................................................................... 37 Innovative Vehicle Solutions............................................................... 25 Old Dominion Freight Line Inc.............................................................. 5 TMW Systems, Inc.................................................................................... 23 TODCO......................................................................................................... 13 TranSolutions Inc...................................................................................... 41 Uline................................................................................................................ 39
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Verizon Connect.......................................................................................... 7 Viking Cold Storage................................................................................. 31
APRIL 2018 | FOOD LOGISTICS
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4/4/18 12:58 PM