tom murphy, rsm mcgladrey, inc
TRANSCRIPT
Risk and Financial Management PanelFPPA 13th Annual ConventionSanibel Harbour – Fort Meyers, FloridaFebruary 23, 2010
Current Manufacturing Situation
Source: U.S. Department of Commerce
Growth in Real Output: U.S. Manufacturing vs. Overall GDP
411%
432%
US Share of Global Manufacturing
Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
Manufacturing Dominates US Exports
Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
US is the #3 Manufacturing Exporter
2007, $Billions
Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
Trade Agreements Do Not Drive the US Trade Deficits
Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
Source: U.S. Department of Commerce
NAFTA Trade Deficit - US
Source: Federal Reserve9
Source: Institute for Trend Research - EcoTrends
Risk and Financial Management in the New Normal
Key RM Components• Performed a risk assessment• Internal audit function• Independent audit committee
Source: RSM McGladrey 2009 Manufacturing and Wholesale Distribution National Survey
Risk Management Infrastructure
Source: RSM McGladrey 2009 Manufacturing and Wholesale Distribution National Survey
Risk Categories
Supply Chain Risks
• Supply interruption or inadequacy• Internal or external quality issues• Transportation interruption or inadequacy• Export/import delays• Labor crises• Traditional disasters• Public relations crises• Business fluctuations
Technical Risks
• System downtime• Software glitches• Malicious attacks on systems• Viruses, worms and other “malware”• Industrial espionage• Your staff
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Severe Weather
18
Flooding
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Transportation
20
FireFire
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Utilities
Recovery Time Impact Escalation
Business Continuity Plans - Needed More Than Ever
• Escalating threat and impact of disasters• More aggressive business environment:
– Increased market competition
• Increased manufacturing complexity– Specialized equipment, lengthy replacement times
• Just-in-time–supply chain risks• More with less–people risks• Increased reliance on technology• Increasing regulatory requirements
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Business Continuity Risk Assessment
Analyze the impact of each threat to your businessConsiderations include:
– Criticality to your operations – Impact on your staff– Ability to repair or replace damaged assets– Ability to access systems remotely– Business and economic risks– Reputation risks– Privacy and control issues
Develop Your Business Continuity Plan
Document procedures to recover critical business processes following a disaster– People, communications, facilities, equipment, records and
other resources needed to recover your operations– Temporary operating procedures to allow critical functions
to continue despite the unavailability of resources– Reconstruction of work-in-process that was lost– Restoration procedures for returning to normal operations
Key Legislative Issues/Risks
Health CareEnergy PolicyTaxesEFCA [Employee Free (Forced) Choice Act]Cap and Trade (Stealth Tax)
Five Things to Focus on Now
Innovation Supply ChainPeopleExportingInformation Technology
2010 National Manufacturing and Wholesale Distribution Survey
Demographics:Survey in field March 2 – April 2Similar questions to drive trend reportingPlan to release results by early JuneIssue & Industry reports available by July 1st
Contact Information:
Tom MurphyRSM McGladrey, Inc.Executive Vice President Manufacturing & Wholesale [email protected]
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