While businesses are experiencing economic uncertainty there are some things that can be done to develop a risk management strategy. Many professionals suggest a proactive approach to keep you from taking each quarter as it comes and possibly losing money. Manufacturing facilities need to take steps now to control costs and try to avoid unforeseen issues. Here are some ideas for your risk management during an uncertain economy.
- Examine your supply chain. Look closely at your suppliers and their financials to determine how to mitigate any slowdowns or stoppages in your processes due to potential closures or other inability to fulfill orders. Determine a backup supplier in case of emergency. Effectively managing your own inventory will also help eliminate problems in the supply chain.
- Consider credit insurance. Another way to eliminate potential risks is to purchase credit insurance for your business. It can protect you from the bankruptcy of a customer and loss of accounts receivables. It can create a more favorable situation for lenders if you’re looking for a business loan. It may make the expansion of sales less risky and reduce the bad debt reserves within your AR department.
- Consider environmental insurance. Many manufacturing facilities deal with hazardous materials. By selecting an environmental insurance policy you are being proactive in the event of an accident occurring at your site. You may even be able to combine this with your general liability insurance coverage.
- Employment or Termination Procedures. You may need to eliminate staff. It is important to maintain all documentation for these situations. You need to have a viable reason for letting an employee go. You may also consider EPLI (employment practices liability insurance) which can help you if a former employee makes a claim against the company. Also make sure that you have effective workers compensation coverage and that you thoroughly investigate and document any claims. You also need to be aware of COBRA coverage. Make sure your human resources department is trained to handle all of these situations. Or work with a staffing company that will manage all of these risks for you.
Are you looking for a partner who understands the specific challenges of manufacturing environments? Contact AtWork personnel today!