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The Interconnected Nature of Supply Chain Risks
March 10, 2023

400 words…under two minute read

What’s new: In June 2022, the U.S. inflation rate peaked at 9.1 percent, the highest since the early 1980s, and grocery costs have increased dramatically over the last year. For example, the price of eggs has grown by 70.1 percent, due to avian influenza, supply chain disruptions and inflation.

Here are some critical insights from Aon leaders on how to tackle the highly interconnected nature of supply chain risks:

  • For many companies, recognizing and addressing supply chain risk can seem like an impossible task. But a unified approach can chart a clearer course of action. According to Richard Waterer, global consulting risk leader for Aon, “A balance between efficiency and resilience is the goal. There is a level of investment that’s required to keep that risk managed within your own risk appetite, but at some point, that level of investment could drop off because you’ll be spending more on managing risk than you are on driving value for the organization. Success looks like striking a balance between those two very broad sets of measures.” Read more in Aon’s The One Brief, “Mitigating Supply Chain Risk with a Single Strategy.”
  • Supply chain disruptions can impact nearly every corner of commerce and amid growing global interconnectedness of risks, business interruption is a major concern among business leaders. Check out “Mitigate Supply Chain Risk with Trade Disruption Insurance” as Aon dives into some of the causes of supply chain vulnerability like climate change, geopolitics and the COVID-19 pandemic, and how trade disruption insurance can serve as a supply chain risk solution.
  • Episode 35 of the “On Aon” podcast discussed the impact of risks like supply chain, inflation and climate change on the food, agribusiness and beverage (FAB) industry. Listen for insights on how Aon is helping clients in the FAB industry make better decisions to address increasing volatility.
  • Climate change is a growing concern for businesses. Thomas Dent-Jones, climate change consultant at Aon, recently shared his insights on interconnected risks related to climate change with Silicon Republic, stating, “Until organizations properly address climate strategy, they are not going to be able to address the climate crisis. This means focusing on where the greatest potential risks are – including property risks, risks in supply chain, legal risks etc. – and then managing and assessing that risk going forward.” Read more here.
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