Risk Central News

Honda Adds 437, 000 Cars to Recall

Honda Motor Co. is adding 437,000 vehicles to its 15-month old global recall for faulty airbags in the latest quality problem to hit a Japanese automaker.

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Toyota Announces Prius Recall

The company is now pulling almost 8.7 million vehicles around the world -- far more than its entire 2009 global sales of 7.8 million vehicles.

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Video: FDA Announces New PREDICT Program to Flag High-risk Imports da @Risk di @Risk

In her speech last week at the Center for Strategic and International Studies, Dr. Margaret Hamburg, Commissioner of Food and Drugs, announced that the FDA is deploying a new web-based information technology system designed to more reliably monitor imports of food and medical products at the port of entry and to target high-risk shipments for further inspection.

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Event-based supply chain disruptions: the Chinese New Year 2010

Incidentally, the Chinese New Year 2010 starts on Valentine’s Day. The latter is an annual (and predictable!) peak in flower and chocolate demand, the former a source of disruption in any shipment that goes through ports where the Chinese New Year is celebrated.

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Toyota Says Global Expansion Not to Blame for Recall

"I do not think that the expansion of the production overseas has affected the quality," Toyota vice president Shinichi Sasaki told a news conference, at which he issued a fresh apology by the company for the massive recall. "We have full trust in engineering and quality,"

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Shared factory? Shared risk!

The French auto group PSA Peugeot Citroen said Feb. 1 it would recall 97,000 Peugeot 107s and Citroen C1s made in a Czech factory it shares with Toyota. PSA said the recall concerned cars "made in a factory shared" with Toyota in the Czech Republic and concerned "models constructed jointly."

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Maplecroft Global Risks Index pinpoints most hazardous countries for business

The Global Risks Index (GRI) measures a combination of strategic risks that are having an increasing impact on the global operations, supply chains and distribution networks of corporations. These include: terrorism, conflict, macroeconomic risks, rule of law, resource security, vulnerability to climate change, natural disasters, human rights violations, poverty, and risks from pandemics and infectious diseases. According to the GRI, 24 countries are at extreme risk, 17 of which are from Africa. Somalia (1), DR Congo (2), Zimbabwe (3) and Sudan (4) top the ranking, whilst Afghanistan (6), Nigeria (10), Iraq (12), Bangladesh (14), Pakistan (15) and Yemen (24) all feature amongst the poorest performing nations and are characterised by weak governance, internal conflicts and regional instability. Several of these countries, including DR Congo, Nigeria, Iraq and Pakistan, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.

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A Risk Top 10 for 2010

From CFO.com, here are finance executives' top 10 risk hot spots for 2010:
1. Strategic change management. The upheaval of the past year and the desire to seize opportunities during the recovery will make for a lot of changes, including mergers, acquisitions, and divestitures. These shifts leave a lot of room for controls to fall through the cracks and can create new liabilities.

2. Capacity. Faced with uncertain demand, companies risk both over- and understaffing. Timing capital expenditures, such as new facilities or equipment, will also pose a challenge.

3. Incentive plans. Compensation is under extreme scrutiny in the wake of the recession and could pose a risk for public companies.

4. Human resources. Layoffs have left many companies with skill gaps and possible holes in their compliance structures.

5. Fraud. Widely thought to pick up (or be revealed) in down times, fraud can be easier to commit at companies that are short-staffed and under pressure, which would describe most businesses today.

6. Innovation/R&D. Companies that have cut back in this area during the downturn risk falling behind their competitors.

7. Third-party relationships. The collapse of Lehman Brothers opened CFOs' eyes to just how careful and far-reaching they need to be in evaluating third parties.

8. Shared services. Under pressure to cut costs, finance executives are exploring new locations for their back-office functions. These changes can affect companies' control structures and processes.

9. Inflation/Deflation. Currency risk remains an open question for 2010.

10. Tax management. Recession-scarred states are looking to raise funds through new taxes and stricter enforcement of existing tax laws.

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Toyota Recall: Time to step on the gas of Risk Management?

The important point for you is NOT what happened at Toyota. Toyota will obviously and thankfully weather this storm and, down the road, repair their image. What matters is this: If an event like this…

Can be linked to a small(ish) supplier
And cause so much damage
At the world’s most respected auto manufacturer

Then all of us have reason to be very afraid. Tomorrow morning, we also need to ask some very tough questions of ourselves and our supply chain and procurement leadership.

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Manufacturers Continue To Experience High Levels of Supply Chain Risk

For the second straight quarter, more than one-third of North American manufacturers responding to the MFGWatch survey, which drew responses from 334 manufacturers of parts and services, purchasing professionals and engineers, say they've experienced a significant supply chain disruption in the past three months.

Also, expectations for excess capacity and employment growth expressed last quarter did not fully materialize.

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