Tuesday, 8 July 2008

Floods, supply chains and cash flow

Floods are a particular problem for supply chain management. When all roads out are rendered impassable there is little comfort in having your factory on the top of a hill; staff can't make it to work, supplies can't be delivered or products shipped.

The impact is on the cash flow of the business. With no shipments there are no invoices and, if customers are also affected by floods then there may well be cancellations or contracts voided because of force majeure.

Bob O'Connor of A.M.Best spotlights the issue in his interview at the AIRMIC Conference with Dan Trueman of Kiln who are working to create insurance products to cover the revenue that the supply chain generates and respond to non-damage business interruptions. This is relevant to small companies as well as large, the sort our Business Continuity Management Online Course is designed to help. For more on that see http://www.riskrisk.com/

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