Supply chain resilience can soften the strike blow

Strikes over the past two years have had a severe impact on Gauteng’s automotive industry supply chain, highlighting the need for supply chain resilience that includes the right insurance cover. The South African Special Risk Insurance Association (Sasria) recently revealed that strikes had seen the industry’s claims value increase from just over R200 million in 2011/2012 to almost R600 million in 2012/2013. A Sasria spokesperson told FTW that, with the National Union of Metalworkers of South Africa (Numsa) strikes, vehicle manufacturers were not the only ones that were impacted, their suppliers were too. In 2013 the strike ran for seven weeks and this year it was four weeks long. “These included companies manufacturing support products such as transmissions, exhausts and wheel hubs which potentially lost export orders to suppliers in other countries because of their failure to meet production and subsequent delivery deadlines,” said the spokesperson. Mike Brews from Horizon Underwriting Managers told FTW that the key to protecting against the short- and longterm effects of disruption within the automotive supply chain was to work closely with an experienced insurance broker to develop a resilient programme of protection and cover. An insurance broker, who wished to remain anonymous, advised that a good broker would include these three key aspects in the overall strategy: • Sasria cover for damage resulting from strike action • Business interruption insurance when a company cannot carry out its day-today duties • Credit insurance to protect the business against defaulting creditors.