bmw risk management
TRANSCRIPT
Datum : 04-06-2016
Page no: 1
BMW annual report 2014 Risk Management
Präsentiert von : Palnivelrajan Manokaran
Problem
Purchase Related Risk action plan
Risk management - why risk management system in BMW?
Page no: 2
Task covered
Risk action plan – Purchasing related risk
How risk has been evaluated ?
Overview of relevant risk
Page no: 3
Overview of Risk Management
Conclusion
Why risk management in BMW
Why risk management in BMW
Page no: 4
BMW Group, owner of the BMW, Mini and Rolls-Royce brands, has been based in Munich since its founding in 1916.
In recent years, China has become BMW’s fastest-growing market, accounting for 14 per cent of BMW’s global sales volume
Despite rising sales revenues, BMW was conscious that its profits were often severely eroded by changes in exchange rates.
Overview of Risk Management in BMW
Page no: 5
To identify, record and actively manage internal and external risks which pose a threat to the attainment of corporate targets
How does it work in BMW?
Why should we do Risk Management ?
Steps for analyzing Risk management
Overview of Risk Management in BMW
Page no: 6
Risk Management
Social risk Environmental risk
Operation( purchasing) Financial Risks Financial services
Risklegal
HOW RISK HAS BEEN EVALUATED ?
RISK
Medium
High
Low
> €500 – 2,000 million
> € 2,000 million
> €0 – 500 million
> €50 – 400 million
> € 400 million
> €0 – 50 million
Earning Impact Risk amount
The significance of risks for the BMW Group is determined on the basis of risk amounts
Impact (net of appropriate countermeasures) Likelihood of occurrence
Risk measuring models Value at risk model Cash flow at risk model
Amount of potential loss Probability of that amount of loss Time frame
Page no: 7
Overview of relevant risk
Page no: 8
Political and global economic risksHigh Stable
Strategic and sector risksMedium Increased
Risk amountChanges compared to prior year
Extensive scenario analyses (> €50 – 400 million)
Cash flow risk approach method ( > € 400 million )
Risks relating to operations
Medium StableProduction and technology (> €50 – 400 million)
High StablePurchasing ( > € 400 million )
High StableSales and Marketing ( > € 400 million )
High StablePension obligations ( > € 400 million )
Medium StableInformation, data protection and IT ( > € 400 million )
Relevant risk
Electrical power train in BMW I Series
Mercedes-Benz’s VS BMW
Page no: 9 http://www.bloomberg.com/news/articles/2016-01-11/bmw-sales-growth-in-2015-decelerated-to-slowest-pace-since-2009
Sales 1.855
1.861.865
1.871.875
1.881.885
1.891.895
1.91.905
S a l e s VO L UM E i n m i l l i o n
BMW BENZ'S
"We will need to be prepared for market volatility in China in the short term," Ian Robertson, BMW’s sales chief, said at the North American International Auto Show in Detroit in Jan 2016
Risks relating to operations is high
Leading automobile Groups worldwide in 2014
Page no: 10
Overview of relevant risk
Page no: 9
Risk amountChanges compared to prior year
Financial risks
High StableForeign currencies ( > € 400 million )
High StableRaw Material ( > € 400 million )
Low StableLiquidity (> €0 – 50 million)
Relevant risk
Risks relating to the provision of financial services
High StableCredit risk ( > € 400 million )
High StableResidual value ( > € 400 million )
Medium StableInterest rate changes (> €50 – 400 million)
Medium StableLiquidity / operational risks (> €50 – 400 million)
Legal risks (> €0 – 50 million)Low Increased
Risk action plan – Purchasing related risk
Purchasing risk
HighRisk amount
StableChanges compared to prior year
Source : BMW annual report 2014, Page no : 72
insufficient availability of raw materials in Asia.
BMW Group Sustainability Standard is a three stage sustainability and risk management approach
BMW Group-specific sustainability risk filter
A sustainability questionnaire
A sustainability audit
Page no: 12
Addressing the claim that 10% of parts are not immediately available in the central warehouse in Dingolfing,
Germany, BMW’s Manfred Grunert , Group Corporate and Governmental Affairs said via e-mail to Bloomberg
Business Week today issue in 2013.
Risk action plan – Purchasing related risk
Risk Explanation Risk Amount Risk response / treatment
Modular-based production High Preselection process High ecological Social and corporate governance standards are measured
Loss of supplier or supplier failure High (Asia ) Continuously monitored during both the development and production phases
Exposure to natural hazard( Floods , Earthquakes…)
High Identify at anearly stage and implement appropriate countermeasures
Availability of raw materials High Alternative raw materials as a substitute.
Page no: 13
Conclusion
Page no: 14
Early identification and penetration of risk , compressive analysis and risk measurement , the coordinated views of suitable management tools and also the montering and evaluation of measure taken.Risk is reported to the centralized risk management team from within the network
Risk management has been tested regularly by internal audit
Social risk
Environmental Risk
Financial services
Risk
Financial Risks
Operation( purchasing)
legal
Risk Management
Vielen Dank
Page no: 15