4 Trends That Will Drive Growth in Canada’s Financial Services Sector in 2019
Today, manufacturing is no longer simply about making products. The recent technological advancements and the evolving customer demands have made it imperative for companies in the manufacturing industry to explore new ways of capturing market value. With this, companies in the manufacturing industry are under relentless pressure to enhance speed to market and customer engagement.
But, like all other industries, the manufacturing industry is also not free of risks. Some of these risks potentially destroy the business, whereas others cause serious damage that can be costly. In this context, it becomes increasingly important for manufacturing companies to monitor and manage all types of qualitative as well as financial risks in the industry. With over 15 years of expertise, Infiniti Research has helped many companies to identify potential risks in the industry and formulate actionable plans to mitigate them.
The client is a well-known manufacturing firm based out of Europe. The client was facing challenges in identifying the potential risks impeding their business growth. Some of the factors causing risks were delays from transportation, issues with third-party vendors, tariff wars, security threats, and workforce management challenges. All these risks not only affected the productivity of the company but resulted in financial losses for the client.Subsequently, , the company was not able to achieve their quarterly targets for 2 years consecutively. This affected the company’s gross profit.
Other challenges faced by the client were:
- The supply chain disruptions were causing major challenges for the client. These delays occurred due to transportation issues and quality control issues with suppliers. Therefore, with Infiniti’s financial risk assessment solution, the client wanted to identify these supply chain risks before they impact the company’s bottom line.
- As cyber risks posed challenges for major manufacturing companies operating in and around Europe, the client wanted to monitor the security threats and mitigate them.
- The client also encountered difficulties in staff management and succession planning. As staff management was essential to keep the business running smoothly, the client wanted to evaluate the workforce risks.
With Infiniti’s financial risk assessment solution, the client wanted to identify all the risks affecting the company and make actionable plans to mitigate them.
Solutions Offered and Value Delivered
The experts at Infiniti Research thoroughly analyzed the client’s historical sales data, factors affecting their sales, and major risks facing the company. In the initial phase, the experts analyzed the risks that the business is exposed to in its operational environment. The second phase included analyzing the link between these risks and different factors within the organization. They also carried out a comprehensive analysis of the severity of the risks and how it affected the business functions. The final phase of the financial risk assessment engagement involved prioritizing the risks based on its severity and managing them individually.
With Infiniti’s financial risk assessment solution, the client was able to identify all the risks affecting their organization and prioritize them according to their severity. Infiniti’s financial risk assessment solution also helped the client to understand all the factors affecting their supply chain delays. This helped them undertake the necessary steps to effectively meet the demands of their products. Consequently, they were able to reduce over-stocks and stock-outs. The experts also helped the client to identify all the cybersecurity threats facing their company. Infiniti’s financial risk assessment solution helped them to protect all their critical data. Also, the financial risk assessment engagement helped the client to understand the workforce management challenges and mitigate them.
Furthermore, with Infiniti’s financial risk assessment engagement, the client was able to:
- Make accurate market forecasts based on patterns derived from historical sales
- Closely monitor the movements in the market and anticipate activities that could potentially affect the financial aspect of the company
- Effectively segregate the tasks to prevent possibilities of fraud and internal threats
- Identify periods of low cash inflows and effectively plan budgets accordingly
With Infiniti’s financial risk assessment solution, the client was able to make better financial planning and meet their quarterly target. Eventually, this resulted in an increase in profit margin by 22%.
How do you conduct a financial risk assessment?
Financial risk assessment involves a detailed analysis of potential risks affecting the organization. A well-devised financial risk assessment process supports companies in identifying the risks in the industry and provides an opportunity to mitigate the risks that are most likely to occur. Having a financial risk assessment strategy will help companies to prepare themselves financially for the most likely risks in the industry.
There are three basic steps in financial risk assessment.
Gathering industry data – The initial process in financial risks assessment process involves gathering industry-specific data. This involves gathering information about the company structure, client base, third party engagement, and more. The information collected from these sources will help companies understand risks associated with each sector of the organization.
Interviewing key stakeholders – The company should identify key stakeholders in the industry. Gathering information from them will help companies categorize the common risks in the market and prioritize them. By closely monitoring the key competitors, organizations can identify the risk mitigation strategies employed by them.
Documenting the report – The final step in financial risk assessment process involves documenting the findings and developing recommendations for mitigating the industry risk.