Even global supply chains are only as strong as their weakest link
With Location Risk Intelligence, you can determine how to secure your supply chains and avoid climate-related disruptions.
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Most organisations can no longer afford to do without global supply chains. In fact, not only is the importance of functioning supply chains growing, but so are the individual supply chains themselves. As a result, the challenges you face in managing them are on the increase, as they are typically made up of a large number of suppliers spread across the world - and are therefore exposed to the global impact of climate risks.
When supply chains are disrupted by natural disasters, supply shortages or even cancellations can occur, resulting in significant financial losses. On average, such disruptions result in an EBITDA loss of 4.2% per year1 for affected companies. With Location Risk Intelligence, you can identify high-risk suppliers early and take proactive mitigating action.
… of supply chain disruptions are caused by adverse weather. And 44.4% of respondents to the BCI Supply Chain Report 2023 consider natural disasters to be a primary concern for supply chain resilience over the next 5 years.2
Sources: 1McKinsey Global Institute; Risk, resilience, and rebalancing in global value chains; 2020; (mckinsey.com) | 2BCI Supply Chain Resilience Report 2023 (sgs.com)
Location Risk Intelligence supports you in the 3 key factors that improve the resilience of your supply chains
With integrated data visualisation, you can use scientific climate data to identify suppliers in your supply chain that are at high risk of being affected by natural disasters or the effects of climate change.
As the potential failure of these suppliers can jeopardise your ability to deliver and result in significant financial and reputational losses, you can react early, i.e. before a corresponding event occurs, by proactively requesting that the affected suppliers take action, or by replacing them with new partners who are exposed to no or significantly lower risks.
If your risk analysis has identified high-risk suppliers and you want to replace them with new suppliers or implement a dual or multi-sourcing strategy, Location Risk Intelligence can help you select new suppliers and business associates for critical components and raw materials that will not be disrupted by climate risks in the future.
It enables you to quickly and reliably identify suitable areas where there is little or no risk from natural disasters or the effects of climate change. The tool accurately interprets even the most complex risk data, using a wide range of functions and visualisation options.
This makes your supply chain much more resilient, because if one of your suppliers is affected by an event, you can immediately switch to one or more alternative sources and maintain your supply capability at all times.
As part of your supply chain management, you can use Location Risk Intelligence and its editions to go beyond the one-off identification of suppliers in high-risk areas, and continuously monitor your supply chains to stay informed of changes in influencing factors.
For example, if construction or infrastructure projects in a particular area introduce risks that did not exist at the time the supplier was selected. Or when natural disasters change conditions in the short term to an extent that could have a long-term impact on a location that was previously considered largely safe or at low risk.
While increasing climate risks are a real threat to your supply chains, they are also a business opportunity
Provided you know how to use them. Not all your competitors are sufficiently prepared, and consequently run the risk of a disruption in their supply chains and failure to meet their obligations to third parties.
This is your chance to step in immediately. And on terms that you might not be able to achieve in direct competition. Or you may have a unique opportunity to convince customers of your value proposition and retain them for the long term. This is because you can demonstrate the resilience of your supply chains: not only in that your suppliers are located in regions that are not affected by climate risks or have very low risk potential, but also because your risk-aware sourcing strategy enables you to fall back on alternative supply partners at any time, thus guaranteeing your ability to deliver.
It's time to reduce your supply chain risks!
Book your demo right now.
Munich Re’s Location Risk Intelligence allowed us to swiftly carry out a risk analysis for all our production sites that is filterable and applicable by specific regions. This gave us an at-a-glance overall view of climate risk.
How Location Risk Intelligence Platform and its editions support you in selecting your third-party suppliers and secure your supply chains
Munich Re's Location Risk Intelligence is a modular SaaS solution that enables you to understand, measure and manage the risks posed by natural hazards and climate change - worldwide.
The following editions are particularly relevant to your day-to-day business needs, enabling you to generate up-to-date climate-related data for individual locations or entire portfolios, and to document the associated exposure to these risks based on scientific evidence.
Location Risk Intelligence
In particular, the platform supports you in integrating climate-related impacts into your supplier selection and your supply chain structure, taking into account natural disasters, climate change and its consequences.
By entering individual locations or uploading entire portfolios into the Location Risk Intelligence Platform, you can easily analyse, visualise, compare, and document natural disasters and make risk-aware decisions. The modular platform not only enables you to identify your current and future climate risks, but also to consider the climate-driven asset devaluation of your own production and distribution sites.
Natural Hazard Edition
This is the ideal solution if you wish to reliably evaluate the current risk to the locations of your suppliers and business partners posed by a comprehensive collection of natural hazards.
In addition to the comprehensive overall risk score, which is based on the three individually accessible detailed scores for earthquake, storm, and flood, you receive dedicated ratings for a total of 12 natural hazards.
Climate Change Edition
Climate Change Edition supports you in analysing and assessing the physical risks associated with climate change in various future scenarios and how these could affect your business associates, distributors or suppliers.
Considering both acute and chronic climate risks, this edition provides information on nine climate hazard scores. And unlike the Natural Hazards Edition, the risk scores are not only calculated on the basis of past events, but also include projected changes in the intensity and frequency of future events under different climate scenarios.