Understanding Risk Assessment Practices at Manufacturing Companies

Deloitte and Manufacturers Alliance for Productivity and Innovation (MAPI) conducted a risk assessment practices study to gain insight into how manufacturing companies are assessing and responding to risks today and how they plan to in the future.

Executives from MAPI’s Internal Audit and Risk Management Councils responded to questions regarding their leading risk assessment practices, the top business and information technology (IT) risks they face, and the intersection of risk management with strategic risk.

This research study was designed to contribute to a growing body of knowledge that can improve risk assessments, risk management, and ultimately position manufacturing companies to be more successful.

The findings illustrate manufacturers have a keen awareness of the present and future risks their organizations face, and have opportunities to fine-tune their strategies to address what lies ahead. Analysis of executive responses identified four questions to explore:

• How is the risk landscape changing?
• What unique risk aspects should manufacturers consider?
• Is risk ownership aligned to address the needs of the organization?
• Can today’s risk assessment techniques assess tomorrow’s top risks?

In addition to considering these key questions, the study also contemplates the environmental factors manufacturers face and how those factors impact the way they respond to risk.

For example, changing customer preferences, new products and applications of technology can rapidly make existing products, manufacturing practices, or even entire business models obsolete.

Consequently, executives are increasing the pace at which they innovate and execute.