Logistic Risk Management

Logistic Risk Management in the Chemical Supply Chain Interview

Mitigating Risk in Hazardous Chemical Logistics

Antti Salminen is EVP for Supply Chain Management at Kemira Chemicals. After his presentation at LogiChem Europe we interviewed Antii to discuss Re-Defining Logistic Risk Management in the Chemical Supply Chain in the Context of the Current Dynamic Economic Environment.

• How do you redefine risk in the context of the current volatile climate?
• Identifying the risks associated with margin squeezes -- cutting cost whilst maintaining compliant supply chain relationships
• Addressing the key risks -- financial, environmental, security and continuity of supply
• Implementing a robust risk management strategy along every step of the supply chain -- shifting from a reactive to a pro-active risk management approach to decrease supply chain vulnerabilities

Interviewer: So, perhaps if we could just start with a brief introduction to who you are and where you fit into the company.
Antti: All right. I'm Antti Salminen and I'm Executive Vice President for Supply Chain Management in Kemira which is an over two billion euro water chemistry company.

Interviewer: You were speaking yesterday, dealing with topics around risk. Perhaps if you could tell us a little bit more about what you were speaking about.
Antti: Yes. I was covering a new angle for looking at risk management in supply chain in the volatile times; the economic environment that we are now facing, and really trying to find new ways to look at how to manage risk in the supply chain.

Interviewer: So what were some of those new findings?
Antti: The basic idea there is that, while it may be a little bit contradictory to what would be the obvious conclusion, when the volatility in the business environment grows, the predictability of your risk portfolio actually increases. This is because the proportional amount of your risk that is associated to completely random phenomena like earthquakes or strikes at the ports, etc., diminishes and you have more manageable risks there.
And what that means in practice is that I think we need to look more at scenario building and strategic working in terms of risk management. Rather than building very elaborate mitigation actions; ‘what would we do after something happens?’ it means building these plans and scenarios asking what can we do up front to avoid this risk realising in the first place?

Interviewer: So how far are you in actually implementing those strategies? Antti: Well, this is something that we're just thus far working on now, so we're in the middle of the process at the moment.

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