Global Sourcing Logistics: How to Manage Risk and Gain Competitive Advantage in a Worldwide Marketplace

must make sure all that could have been done was in fact ac-

complished. Ensuring that the safety of personnel is a prior-

ity in the risk management process and is in everyone’s best

interest.

Companies that engage in offshore manufacturing are likely to have

purchasing personnel, engineers, operations personnel, and senior man-

agement travel to the countries involved. Often personnel are abroad for

extended times. The exposure is real and should be managed proactively.

Property and Liability

Companies operating in the United States have property

and liability exposures in their buildings, trucks, plants,

warehouses, and so on. If they operate these overseas, they

have the same exposures, often with further complications.

If they employ people who conduct business in foreign mar-

kets, the liability exposures follow them there. Basically,

every exposure that exists in U.S. business operations will be

found in foreign operations. Combined with local culture,

law, and politics, these exposures could be worsened. The

host of local customs, laws, and regulations make foreign

risk exposures potentially more serious.

It is the responsibility of the risk manager to ensure sup-

ply chain personnel understand how the supply chain op-

erates in the foreign location, so they can understand the

exposures and provide the necessary insurance solutions.

Companies that operate globally may have complex risks

and exposures that require appropriate risk management

initiatives. Some of the areas of exposures are as follows:

• Building and contents coverage

• General liability

• Employment practices liability

• Employee dishonesty

• Business income protection

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